Portfolio includes select OTC and prescription products and two manufacturing facilities
Transaction further accelerates Company’s deleveraging plan
Takeda Pharmaceutical Company Limited (TSE:4502/NYSE:TAK) ("Takeda") today announced that it has entered into an agreement to divest a portfolio of select non-core over-the-counter (OTC) and prescription pharmaceutical products sold in Europe, and two manufacturing sites located in Denmark and Poland to Orifarm Group ("Orifarm"), a fast-growing Danish pharmaceutical company, for up to approximately $670 million USD subject to customary legal and regulatory closing conditions.
The portfolio to be divested to Orifarm includes a variety of OTC products and food supplements as well as select prescription products in the Respiratory, Anti-inflammatory, Cardiovascular and Endocrinology therapeutic areas sold predominantly in Denmark, Norway, Belgium, Poland, Finland, Sweden, the Baltics and Austria. The portfolio generated FY 2018 net sales of approximately $230 million USD, driven by strong sales of cough/cold and vitamin OTC brands, as well as prescription products Warfarin and Levaxin. While the products included in the sale address key patient needs in these countries, they are outside of Takeda’s chosen business areas – Gastroenterology (GI), Rare Diseases, Plasma-Derived Therapies, Oncology, and Neuroscience – core to its global long-term growth strategy.
"These divestments will enable us to further prioritize and reinforce efforts in our core business areas" said Giles Platford, President, Europe & Canada Business Unit, Takeda. "Throughout the robust sale process we conducted for these assets, we focused on finding the right partner to maximize the value of these trusted products and maintain continuity of supply for the patients and customers who depend on them. We are confident that Orifarm is the right partner for these regions."
"This transaction represents the continued execution of our strategy to simplify our portfolio and accelerate deleveraging. We remain focused on investing in our key business areas as we continue strengthening our position as a R&D-driven global biopharmaceutical leader and deliver enhanced value for patients and Takeda shareholders," said Costa Saroukos, Chief Financial Officer, Takeda.
Takeda has announced a series of divestments in the past twelve months, contributing to the Company’s goal to divest approximately $10 billion USD in non-core assets and focus on its key business areas. Takeda announced last month the sale of non-core products in Latin America to Hypera Pharma for $825 million USD. Takeda also completed sales of non-core assets spanning the Russia-CIS region to STADA for $660 million USD and in countries spanning the Near East, Middle East and Africa region to Acino for over $200 million USD last month. In July 2019, Takeda completed the sale of Xiidra® to Novartis for up to $5.3 billion USD.
Takeda intends to use the proceeds from its divestitures to continue to reduce its debt towards its target of 2x net debt/adjusted EBITDA within March 2022 – March 2024.
Takeda has entered into an agreement to sell a portfolio of approximately 110 select OTC and prescription pharmaceutical assets sold in Europe to Orifarm for a total value of up to approximately $670 million USD subject to customary legal and regulatory closing conditions. Orifarm will pay approximately $505 million USD to Takeda in cash at closing, and approximately $70 million USD in non-contingent cash to be paid within four years post-closing. In addition, Takeda may receive up to an additional $95 million USD in potential milestone payments.
Two manufacturing sites in Denmark and Poland will also be transferred to Orifarm at closing. The parties will also enter into additional manufacturing and supply agreements, under which Takeda will continue to manufacture selected products on behalf of Orifarm. Under the terms of the agreement, Orifarm will acquire the rights, title and interest to the products in the portfolio exclusive to these countries.
It is anticipated that approximately 600 employees from the manufacturing sites, sales and marketing professionals, and other select professionals supporting the portfolio and manufacturing sites to be divested will transition to Orifarm at closing of the transaction.
The transaction is expected to close by the end of Fiscal Year 2020 (ending March 2021) subject to the satisfaction of customary closing conditions, receipt of required regulatory clearances and, where applicable, compliance with local works council requirements. Until then, the products will continue to be made available to patients and manufactured and supplied by Takeda.
Takeda is being advised by J.P. Morgan as our financial advisor and White & Case is our legal advisor in this transaction.
Financial information relating to the transaction and the assets have been converted from Euros using the $:€ of 1:0.9235 as of April 23, 2020. For the avoidance of doubt, the amounts payable as part of the transaction are denominated in Euros.
About Takeda Pharmaceutical Company Limited
Takeda Pharmaceutical Company Limited (TSE:4502/NYSE:TAK) is a global, values-based, R&D-driven biopharmaceutical leader headquartered in Japan, committed to bringing Better Health and a Brighter Future to patients by translating science into highly-innovative medicines. Takeda focuses its R&D efforts on four therapeutic areas: Oncology, Rare Diseases, Neuroscience, and Gastroenterology (GI). We also make targeted R&D investments in Plasma-Derived Therapies and Vaccines. We are focusing on developing highly innovative medicines that contribute to making a difference in people's lives by advancing the frontier of new treatment options and leveraging our enhanced collaborative R&D engine and capabilities to create a robust, modality-diverse pipeline. Our employees are committed to improving quality of life for patients and to working with our partners in health care in approximately 80 countries.
For more information, visit https://www.takeda.com.
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Head, Integration & Divestiture Communications
Kazumi Kobayashi (Japan)