In an announcement this morning Australian pharmaceuticals business Mayne Pharma Group Ltd (ASX: MYX) said it will buy Efudex® from Spear Pharmaceuticals Inc for up to $US30 million.
Mayne Pharma is a speciality pharmaceutical company, manufacturing and selling generics and branded drugs throughout Australia and the world.
Efudex® is also known as Fluorouracil and is used to treat skin cancer and other skin disorders.
Mayne Pharma CEO Scott Richards said the deal will complement the company’s existing product suite and build on its growth plans.
“Fluorouracil cream will further diversify earnings and strengthen Mayne Pharma’s position in the US dermatology market,” Richards added.
The deal values Efudex® up to $US30 million. Mayne Pharma will pay Spear Pharmaceuticals $US20 million upfront, including $US4 million of Mayne Pharma shares. Mayne could also pay an additional $US10 million to Spear, depending on competition in the market over the next three years.
Quoting data from IQVIA from May 2018, Mayne Pharma said generic sales of Efudex® total $US66 million and volumes have been growing around 10% per year over the past five years.
The acquisition is expected to be immediately earnings per share (EPS) accretive, Richards said.
“Mayne Pharma is committed to pursuing accretive transactions, such as this one, to deliver further value to its shareholders, particularly where we can leverage our existing commercial operations and know-how,” Richards concluded.
Mayne Pharma shares were trading 3% higher on Monday, according to Google Finance.
