BioPhausia focuses and sells OTC products to Meda for SEK 190 million

28-Sep-2010 - Sweden

BioPhausia signed an agreement to sell its portfolio of OTC products to Meda for a total of SEK 190 million, plus the value of the inventory. The Company has also completed the previously communicated strategic review of its generics portfolio, allowing further concentration on prescription pharmaceuticals which have better profitability potential. An associated review of the Company's intangible assets in the form of impairment testing has also been carried out. In total, the measures have had a negative impact of approx. SEK 138 million on operating profit, with approx. SEK 74 million of this figure relating to the pharmaceuticals sold to Meda. The sale proceeds will strengthen the Company's financial position and allow the bank loans of SEK 195 million to be fully repaid.

The divested OTC portfolio contains eight over-the-counter drugs, including Novalucol, Novaluzid and C-vimin, which are strong brands in Sweden and its Nordic neighbours. The transaction also includes the prescription drug Acetylcystein and certain other trademark rights. Payment was made in cash and the transaction will be completed in September 2010.

Total sales revenue for the divested products for 2009 was SEK 88 million. This accounted for approx. 42 percent of the Own products segment's sales and represented an EBITDA of SEK 29 million, corresponding to 37 percent of the segment's EBITDA. The sales proceeds mean Biophausia's bank loans of SEK 195 million can be fully repaid, although they do not affect the Company's debentures and operating loans. Annual cash flow will improve by approx. SEK 85 million as a result of reduced repayments and interest payments, without considering the impact of the sold portfolio.

"The re-regulation of the pharmacy market has created new conditions for over-the-counter drugs," says BioPhausia's CEO Maris Hartmanis. "We believe that future success in OTC requires considerable volumes and large product portfolios, and Meda already has OTC sales of approx. SEK 1.5 billion. The transaction with Meda is part of our ongoing streamlining process and allows us to free up resources for future investments in prescription drugs."

https://www.bionity.com/en/news/123441/biophausia-focuses-and-sells-otc-products-to-meda-for-sek-190-million.html