Bristol-Myers Squibb enters a collaboration agreement with Reckitt Benckiser Group plc
Posted: 12 February 2013 | | No comments yet
Bristol-Myers Squibb has entered into an agreement with Reckitt Benckiser Group…
Bristol-Myers Squibb Company (NYSE: BMY) today announced it has entered into a three-year collaboration agreement with Reckitt Benckiser Group plc (LSE: RBL) for several of its over-the-counter medicines currently sold across Latin America, primarily in Mexico and Brazil.
Under the terms of the collaboration agreement, Reckitt Benckiser will pay Bristol-Myers Squibb an upfront payment in the amount of $438 million for the exclusive rights to sell, distribute and market the following medicines for a three-year period: Picot, an antacid, Tempra, a pain reliever and fever reducer, Micostatin, an antifungal, and Graneodin, a cough and cold medicine, sold primarily in Mexico; and Dermodex, an anti-rash cream, Luftal, an anti-gas medicine, and Naldecon, a cold and flu symptoms treatment, sold primarily in Brazil.
“As part of our BioPharma strategy, Bristol-Myers Squibb has worked to focus its businesses around the world on innovative medicines in areas of high unmet medical need,” said Charles Bancroft, executive vice president, Intercontinental Region and Japan, and chief financial officer. “This agreement allows us to increase our focus on the launch and commercialization of our innovative portfolio in these important markets in Latin America.”
During the collaboration term, Bristol-Myers Squibb will retain responsibility for manufacturing all of the products covered by the collaboration (either by itself or through third party manufacturers), and Reckitt Benckiser will purchase products from Bristol-Myers Squibb and pay royalties on product sales during the term of the collaboration.
Reckitt Benckiser will also pay to Bristol-Myers Squibb an option fee in the amount of $44 million for the right to purchase these products outright at the end of the three-year term, acquiring the sales, marketing, and distribution rights, along with assets related to the products, including the trademarks, remaining inventories, and certain other assets. Subject to certain rights it has to extend the term of the supply agreement with Bristol-Myers Squibb, Reckitt Benckiser would then assume all responsibility for the products. The purchase price will be based on average net sales during the two year period preceding the closing of the sale. No manufacturing facilities will be transferred from Bristol-Myers Squibb to Reckitt Benckiser Group plc as part of this transaction.
The transaction is subject to the satisfaction or waiver of customary closing conditions, including competition law authorizations in Brazil and Mexico.
Jefferies Group, Inc. acted as exclusive financial advisor to Bristol-Myers Squibb, and Kirkland & Ellis LLP acted as its legal adviser.