B-MS outsources manufacture of products in 5 year deal
The five year manufacturing contract is part of deal that sees a B-MS facility in Victoria, Australia and the rights to make and distribute 15 of its products in Australia and New Zealand transferred to Sigma Pharmaceuticals.
Australia-based Sigma has entered into similar contracts with GlaxoSmithKline, Sanofi-Aventis and Bayer. The company anticipates generating revenues of A$17m from the B-MS contract and intends to retain all 140 staff employed at the Victoria facility.
As part of the deal Sigma has gained the rights to make and distribute 15 B-MS products, including Lipostat (pravastatin), in Australia and New Zealand. The products are generic, generally niche and have annual sales of $33m.
Funding the buy and cutting debt
Sigma is raising A$297m from shareholders to fund the acquisition and help cut its debt, which is currently A$227m. To achieve this Sigma has halted trading and is offering shareholders one new share at a 16 per cent discount for every three that they own.
The release of news about the B-MS was accompanied by preliminary results for the first six months of 2009. Over this period net profit rose by 4.9 per cent A$32.2m, underpinned by a 3.5 per cent increase in sales.
For the first half of 2009 total sales were A$1.54bn, which in coming financial results will be supplemented by the B-MS contract manufacture revenues and sales of the 15 products.