Tolmar in sale-leaseback deal to snap up QLT USA
manufacturing plant in a move to fund the purchase of the US assets
of biopharmaceutical QLT. The plant, sold for $13.6m (€10.5m), will
be leased back to Tolmar under a long-term triple net lease.
Canada-based QLT announced the intended sale of its generic dermatology and manufacturing business (QLT USA) at the end of December 2006, in a deal worth $21m. 60 per cent was paid in cash, and this latest sale-leaseback deal has meant that Tolmar has been able to pay off the remaining fee ahead of its end of Q1 deadline.
"The acquisition of QLT's US assets was a critical component of our overall corporate strategy," said Tolmar CEO Mike Duncan, "providing entry into the US market and acquiring manufacturing capabilities in multiple drug areas."
Through its related companies, Tolmar already operates five manufacturing facilities outside the US, selling commercially branded generics and in-licensed products in over 17 countries. Taking advantage of the QLT divestment gives Tolmar a key break into the US market.
For QLT, the sale means the company can focus on its core business of developing treatments for eye diseases, as well as generating some much needed cash.
The company's top product, Visudyne (verteporfin for injection), for the treatment of certain forms of wet age-related macular degeneration (AMD), has taken a hit since alternative treatments such as Genentech's Lucentis (ranibizumab injection) have been approved.
Despite recent warnings from Genentech that Lucentis may increase the risk of stroke in some patients, analysts are still predicting that the drug will deliver a strong performance and the drug received approval in the EU for the treatment of AMD less than two weeks ago.
In October QLT was forced to drop its forecast annual sales range for Visudyne from $370m-$385m to $340m-$355m in the face of this new challenge, and marketing partner Novartis recently announced that sales of the drug have fallen nearly 29 per cent in the fourth quarter 2006.
In an effort to compensate for the decline in sales, QLT initiated a cost-reduction plan, which included staff cuts among other measures.
One of the firm's other top products has also had a hard time during the past year. Sales of Eligard (leuprolide), approved for the palliative treatment of advanced prostate cancer, were temporarily suspended following patent litigation for a few months between March and May 2006.
The company doesn't seem to think this will have had much of an impact on overall sales however, as in October it raised the predicted annual sales range for the product from $100m-$115m, to $110m-$120m.
QLT will release its full financial results on February 22, when the full picture regarding the pipeline challenges and plant sale may become clear.
