PLIVA Successfully Completes Exit from Proprietary Business

16-Feb-2006

PLIVA d.d. announced a deal in which it has reached agreement with GlaxoSmithKline (GSK) for the purchase of PLIVA - Istrazivaki Institut d.o.o. (PLIVA - Research Institute Ltd.), PLIVA's proprietary R&D arm renowned for its research into macrolides, in Zagreb, Croatia. In May 2005, PLIVA announced its strategic intent to completely focus on its generics operations and exit the proprietary business. Following the divestments of the majority of PLIVA's US proprietary business and Research Institute in Zagreb, PLIVA has now successfully completed its strategic objective of exiting the proprietary segment.

Under the terms of the agreement, PLIVA will receive an upfront payment of USD 35m and, conditional on the entry of certain early stage projects into clinical development, contingent payments totaling up to USD 15m, thus the total potential cash consideration may be up to USD 50m. In addition, PLIVA will receive contingent royalty-based consideration pending commercialisation of certain assets. GSK will also take on all 130 employees of the PLIVA - Research Institute and will gain full ownership of the company, including all intellectual property and other assets, while PLIVA will retain ownership of the building which will in part be under long term lease to GSK.

The closing of the transaction is expected to occur during April 2006, subject to obtaining necessary regulatory approvals, and should result in a respective book gain of about USD 20m in the same period. Remaining proprietary projects have been reclassified as Discontinued Operations and written off in Q4 2005 resulting in a mainly non-cash charge of up to USD 38m.

https://www.chemeurope.com/en/news/52329/pliva-successfully-completes-exit-from-proprietary-business.html