20th May 2014 12:15
LONDON (Alliance News) - Dechra Pharmaceuticals PLC said Tuesday it has acquired the trade and assets of PSPC Inc. for a consideration of up to USD10 million as it continues to strengthen its US portfolio.
Dechra said it is also in negotiations to buy PSPC's US manufacturing facility.
PSPC, based in Melbourne Florida, USA, develops animal supplements. The firm's principal product is Phycox, a patented nutraceutical which is currently achieving sales in North America of approximately USD4.5 million per annum. A new product is also in the final phase of development, anticipated to be launched in the first-half of the next financial year, expected to bolster Dechra's endocrinology therapeutic category.
Under the terms of the deal, USD8.5 million of the consideration is payable in cash on completion and USD1.5 million is contingent upon the successful registration of the new product, said Dechra.
As part of the acquisition arrangements, Dechra will also pay an initial royalty of 10% on total net sales, increasing by 2.5% if annualised sales achieve in excess of USD7.5 million with an additional 2.5% payable on annualised sales in excess of USD12.5 million for the life of the Phycox patent.
"This deal... clearly demonstrates the continuing delivery of our strategic ambitions. Both Osphos and Phycox complement Dechra's existing US product portfolio and should provide growth opportunities over the coming years... We are confident that we can build upon the strong penetration Phycox has already achieved in a fragmented but growing market by leveraging Dechra's established sales and marketing expertise behind Phycox which has had little historical marketing support," said Ian Page, Dechra's Chief Executive.
The acquisition is expected to be completed by the end of June 2014.
Earlier in the month Dechra said it had received approval from the US Food and Drug Administration and the UK Veterinary Medicines Directorate for its Osphos product, used to treat navicular syndrome in horses, and marketing approval for the re-launch of sterile ophthalmic treatments Vetropolycin and Vetropolycin HC in the US, after they were transferred into a new manufacturing site.
Shares in Dechra Pharmaceuticals were trading marginally higher Tuesday afternoon, up 0.48% at 686.25 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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