Alkermes plc has agreed to sell its manufacturing facility in Gainesville, Georgia, the manufacturing and royalty revenue associated with products made at the facility and global rights to Meloxicam IV/IM to Recro Pharma Inc. Alkermes stated it will receive an initial cash payment of $50 million, development and commercialization milestone payments of up to $120 million related to Meloxicam IV/IM and low double-digit royalties on net sales of Meloxicam IV/IM. The transaction is anticipated to close in the second quarter of 2015.
Assets being sold as part of the transaction include the Good Manufacturing Practices (GMP) facility in Gainesville, which was acquired by Alkermes in 2011 as part of its business combination with Elan Drug Technologies; Alkermes’ rights to RITALIN LA, FOCALIN XR, VERELAN, ZOHYDRO ER and BIDILTM; and the late-stage, parenteral formulation of Meloxicam IV/IM, a nonsteroidal anti-inflammatory drug, which has completed multiple phase 2 trials for the management of moderate-to-severe acute pain, as well as related technology.
“We are streamlining Alkermes’ manufacturing operations for our commercial products and late-stage pipeline into our two GMP facilities in Athlone, Ireland, and Wilmington, Ohio,” said James Frates, Chief Financial Officer of Alkermes. “With this transaction, we are capturing value from non-core assets, as we continue to execute on our strategy and focus on the key driver of our future growth – our late-stage pipeline of innovative medicines for central nervous system diseases.”
The transaction is expected to increase the company’s cash and total investments by $50 million, but revenues will decrease by approximately $40 million. The company reported cash and total investments of about $802 million at Dec. 31, 2014. Read the full release