Actavis plc (ACT) entered into an agreement with Mayne Pharma for the divestment of U.S. rights to Doryx (acne) and related assets.
Actavis will receive $50 million on completion of the deal. The deal is expected to close by the end of this month.
Meanwhile, with the divestment of this product, Actavis will be able to focus on one of its core therapeutic areas like the expanding dermatology portfolio, which will become a part of the company’s portfolio once the Allergan Inc. (AGN) acquisition goes through later this year.
Our Take
This is the second divestment agreement announced by Actavis this month. Last week, the company struck a deal with AstraZeneca plc (AZN) under which AstraZeneca will acquire rights to Actavis’ branded respiratory business in the U.S. and Canada.
We are positive on Actavis’ efforts to focus on core strategic therapeutic areas and its efforts to build its branded and biosimilars pipeline. The company has entered into several deals and completed quite a few acquisitions over the last few quarters including the Forest Labs and Durata Therapeutics acquisitions. The upcoming Allergan acquisition will lead to the creation of one of the top 10 global pharmaceutical companies by sales revenue.
Actavis will be reporting fourth quarter and full year 2014 results on Feb 18. Earlier this year, the company had said that based on a preliminary review, it expects EPS to exceed Wall Street consensus estimates by 10% – 15%.
Actavis carries a Zacks Rank #2 (Buy). A better-ranked stock in the health care sector is Impax Laboratories (IPXL), sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment