Teva to Sell ParaGard for $1.1 Billion to Reduce DebtBy
Israeli drugmaker sells contraceptive product to Cooper Cos.
Deal is part of company’s plan to divest $2 billion in assets
Teva Pharmaceutical Industries Ltd. agreed to sell its ParaGard intrauterine contraceptive device business to Cooper Cos. for $1.1 billion as the world’s largest maker of generic drugs works to reduce debt.
ParaGard belongs to Teva’s women’s health unit, which the company has sought to divest. The device had revenue of $168 million for the 12 months ended June 30, the Israeli drugmaker said in a statement late Monday. Teva said it is seeking to sell the rest of the women’s health division as well as its oncology and pain units in Europe. It aims to generate a total of $2 billion from the deals, as well as other divestments to be made by year end.
Teva’s shares soared for a second day, rising as much as 8.6 percent in Tel Aviv, after the embattled drugmaker concluded a seven-month search for a new leader and named named Kaare Schultz of H. Lundbeck A/S as its new chief executive officer.
The company is disposing of assets, closing down factories and cutting jobs in an effort to stabilize its financial footing. With more than $30 billion in borrowings that exceed its market value, Teva has warned investors that it risks breaching its debt covenants this year if it doesn’t reap the expected $2 billion from the asset sales.
Last month, the company lowered its profit guidance and slashed its dividend.
Revenue from the women’s health portfolio -- which includes ParaGard and the Plan B One-Step emergency contraceptive pill -- has declined for at least three years in a row. It slumped to $458 million for 2016, and accounted for about 2 percent of the drugmaker’s overall sales, according to the annual report. Teva acquired ParaGard and Plan B through its acquisition of Barr Laboratories Inc. for $8.72 billion in 2008.
The ParaGard transaction includes Teva’s manufacturing facility in Buffalo, New York, which makes the device. It’s expected to close before the end of the year. Cooper, a medical-device company based in Pleasanton, California, said in a separate statement the deal will add 70 cents to 75 cents to its earnings per share in the first year.
Teva shares rose 8.3 percent to 68.80 shekels at 10:17 a.m. in Tel Aviv trading.