Biopharma Business

Irish consumer healthcare and generic drug group Perrigo said has agreed to sell the royalty stream from its multiple sclerosis drug Tysabri to another Irish group, privately held Royalty Pharma, for up to $2.85 billion (€2.7 billion).

Perrigo said it would delay the filing of its annual report until March, and would review past accounting practices, specifically its historical revenue recognition of its Tysabri sales.

The company also said its chief financial officer, Judy Brown, was stepping down, to be replaced by an interim finance head.

The deal with Royalty Pharma comprises $2.2 billion in cash at closing and up to $650 million in potential milestone payments, according to a statement by Perrigo,

It was Royalty’s hostile approach for Elan back in early 2013 that saw the Irish company put itself on the market in a process that eventually saw Perrigo, under Mr Papa, take control though a corporate inversion arrangement. Royalty specialises in acquiring streams of patent revenue from drugs such as Tysabri, which was developed by Elan.

Royalty Pharma, like Perrigo, is Irish-domiciled though its operational headquarters are in the United States.

Perrigo also announced that it might sell a unit focused on making drug ingredients and said it expects to reduce its global workforce by 750 employees.

The sale of Tysabri follows Perrigo’s settlement this month with activist hedge fund Starboard Value. Starboard, which won Perrigo board representation as part of the settlement, had been advocating for the company to sell assets to unlock value for shareholders.

Perrigo’s stock is down more than 50 per cent since its highs in late 2015, when it was fending off unwanted takeover interest from Dutch generic drugmaker Mylan, another construct of a corporate inversion.

Perrigo succeeded in convincing investors to shun the bid, in part by citing the its potential to perform well on a standalone basis.

Last year, Perrigo’s former chief executive officer, Joe Papa left the company for a job at specialty drugmaker Valeant Pharmaceuticals International. He was replaced by Perrigo veteran John Hendrickson.

Ms Brown will join Amgen to serve as a senior vice-president in charge of global business services and finance, Amgen said. The current senior vice-president of global business services, Michael Kelly, is retiring, Amgen added.

Ms Brown is positioning herself to succeed Amgen’s current chief financial officer, David Meline (59), when he eventually retires, according to people familiar with the matter.

Written by Reuters