Dechra Pharmaceuticals acquires assets of PSPC

20th May 2014 10:29

Dechra Pharmaceuticals has snapped up the assets of veterinary products maker PSPC Inc. for 10m dollars, strengthening its US product portfolio. The firm's main product is Phycox, which currently generates sales of around $4.5m a year in North America. A new product is in the final phase of development and is anticipated to be launched in the first half of the next financial year, bolstering Dechra's endocrinology therapeutic category.The assets being acquired include intellectual property, 'know-how', inventory and manufacturing equipment. Dechra is also currently in negotiations to buy PSPC's US manufacturing facility.The FTSE 250-listed group will pay $8.5m of the consideration in cash on completion, while the other $1.5m is contingent upon the successful registration of the new product. 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 total more than $7.5m, with an additional 2.5% payable on annualised sales of more than $12.5m for the life of the Phycox patent. Dechra Chief Executive Officer Ian Page said: "This deal, coupled with the launch of Osphos which we announced earlier this month, 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. "In relation to today's announcement, 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. We are also very excited about the opportunity that the new product, already at an advanced stage of development, can deliver." The share price climbed 0.51% to 686.50p by 10:36 on Tuesday.NR