US portfolio strengthened though acquisition

RNS Number : 5260H

Dechra Pharmaceuticals PLC

20 May 2014

 

Tuesday, 20 May 2014

Dechra further strengthens its US product portfolio through acquisition

Dechra Pharmaceuticals PLC (Dechra or Group) is pleased to announce the acquisition of the trade and assets of PSPC Inc. (PSPC) for a consideration of up to US$10 million.

PSPC's principal product is Phycox ®, a patented nutraceutical currently achieving sales in North America of approximately US$4.5 million per annum.  Phycox competes in the US Veterinary joint health supplement market, a sector estimated at US$55 million. Additionally a new product in the final phase of development is anticipated to be launched in the first half of the next financial year (ending June 2015) and is expected to bolster Dechra's endocrinology therapeutic category.

Based in Melbourne Florida, USA, PSPC's assets include intellectual property, 'know-how', inventory and manufacturing equipment.  Dechra is also currently in negotiations to buy PSPC's US manufacturing facility.

US$8.5 million of the consideration is payable in cash on completion and US$1.5 million 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 achieve in excess of US$7.5 million with an additional 2.5% payable on annualised sales in excess of US$12.5 million for the life of the Phycox patent.

Ian Page, Chief Executive Officer, 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 acquisition is expected to be completed by the end of June 2014.

PSPC -About the Products

As pets' life expectancy increases, they are more prone to age related ailments, including osteoarthritis and poor joint health.  Phycox is a veterinary joint supplement for dogs and horses that contains glucosamine, MSM, creatine, antioxidants and phycocyanin.  Phycocyanin is an extract from blue-green algae that has a patent which supports its use as a COX-2 selective agent that alleviates pain and inflammation without the side effects that occur with non-steroidal anti-inflammatory drugs that are not COX-2 selective.  The product is currently sold through a distributor into approximately 3,000 of the US' 26,000 companion animal veterinary clinics.

PSPC has recently launched a Vitamin K1 soft chew under a private label.  Vitamin K1 products are extensively used in the treatment of dogs and cats that have been poisoned by eating rat poison.  The product will be rebranded and marketed by Dechra and has potential sales of up to US$1 million.  Additional products are at an advanced stage of development and technical information is being compiled; these will complement one of Dechra's current key therapeutic focus categories.

Enquiries:
Dechra Pharmaceuticals PLC	Stock Code: Full Listing (Pharmaceuticals): DPH
Ian Page, Chief Executive Officer	Mobile: [phone]
Anne-Francoise Nesmes, Chief Financial Officer	Mobile: [phone] Office: [phone]
e-mail: [e-mail]
TooleyStreet Communications Ltd
Fiona Tooley, Director e-mail: [e-mail]	Office: [phone] Mobile: [phone]

About Dechra

Dechra is an international specialist veterinary pharmaceuticals and relates products business.  Its expertise is in the development, manufacturing and sales and marketing of high quality products exclusively for veterinarians worldwide.  Dechra's business is unique as the majority of its products are used to treat medical conditions for which there is no other effective solution or have a clinical or dosing advantage over competitor products.  For more information please visit: www.dechra.com.

Trademarks

Dechra and the Dechra "D" logo are registered trademarks of Dechra Pharmaceuticals PLC.

 

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