Assertio Therapeutics has signed a definitive agreement to sell its Nucynta franchise to Collegium Pharmaceutical for a cash consideration of $375m.
The deal will provide Collegium with the US licence for the Nucynta franchise of products. Besides $375m, Collegium will pay Assertio for some inventories and equipment related to the products.
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By GlobalDataUnder the agreement, Collegium will be exempt from paying royalties to Assertio.
However, the company will continue to pay 14% sales royalty on the Nucynta franchise to Grunenthal but will not be required to pay additional royalty on sales higher than $180m.
Nucynta is made up of an opioid to manage acute pain in adults who experience inadequate response or are intolerant to other pain medication such as non-opioid pain drugs.
The Nucynta franchise comprises extended-release and an immediate-release formulation of tapentadol. Patents for the products expire in June 2025. Collegium notes that the franchise may receive a six-month paediatric extension.
Assertio Therapeutics president and CEO Arthur Higgins said: “With this transaction, our goal is to retire our outstanding debt and have approximately $50m of cash on our balance sheet.
“We will use this new flexibility to pursue business development, strategic partnerships and investment opportunities with the goal of having our remaining business becoming cash flow and EBITDA positive by the end of the year.”
Stifel was the financial advisor to Assertio, while Gibson, Dunn & Crutcher and Greenberg Traurig acted as legal counsel.
Collegium Pharmaceutical president and CEO Joe Ciaffoni said: “Acquiring the full US rights to the Nucynta franchise is financially transformative for Collegium. We expect the acquisition to improve annual EBITDA and operating cash flows by more than $100m.
“The transaction is supported by a financing structure that allows for rapid de-leveraging and enables us to pursue future business development transactions.”