PDL BioPharma Buys Novartis Hypertension Drugs

May 25, 2016

PDL BioPharma Inc. has committed to an equity investment in Noden Pharma DAC, a new privately held company that has executed a purchase agreement with Novartis AG to acquire exclusive worldwide rights to manufacture, market, and sell the branded prescription medicine product sold under the name Tekturna and Tekturna HCT in the United States, and Rasilez and Rasilez HCT in the rest of the world.

The product's active ingredient is aliskiren, which is indicated for the treatment of hypertension. The drug was previously marketed by Novartis and had estimated global sales in 2015 of $154 million. The transactions are expected to close upon Hart-Scott-Rodino regulatory approval or expiration of the related waiting period. PDL's equity investment will ultimately result in an 88% equity interest in Noden. Given this anticipated majority ownership by PDL, the financial statements of Noden will be consolidated with PDL, which is expected to be immediately accretive to PDL's cash earnings, according to a press release.

"PDL has completed many diverse deal structures for biotech/pharma companies looking to secure funding, and today's announcement commits PDL to its first significant equity investment as part of an acquisition of a specialty pharmaceutical
product," stated John P. McLaughlin, president and CEO.

PDL expects to make equity contributions to Noden totaling approximately $107 million in the first year of the transaction, with an initial equity investment of $75 million to be made upon closing of the transaction, and an additional $32 million equity contribution commitment on the one-year anniversary of the closing of the transaction.

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