- TXMD to receive approximately $153.1 million
in consideration at closing (including approximately $13.1 million
for acquired net working capital), up to approximately $42.6
million in minimum royalty payments, and up to $30.0 million in
additional milestone payments -
- Mayne Pharma gains exclusive U.S.
commercialization rights for TXMD’s products -
- Transaction allows TXMD to recapitalize and
transform into a pharmaceutical royalty company -
TherapeuticsMD, Inc. (NASDAQ: TXMD) (“TherapeuticsMD,” “TXMD” or
the “Company”), an innovative, leading women’s healthcare company,
today announced that it has entered into definitive agreements to
license its products to an affiliate of Mayne Pharma Group Limited
(“Mayne Pharma”), an ASX-listed specialty pharmaceutical company
focused on commercializing novel and generic pharmaceuticals, for
commercialization in the United States. In addition, TXMD has
agreed to sell certain assets to Mayne Pharma to allow Mayne Pharma
to commercialize the products.
At closing of the transaction, TXMD will receive an upfront cash
payment of $140.0 million for the license grant and sale of certain
assets, plus an additional approximately $13.1 million, subject to
customary adjustments, for acquired net working capital. In
addition, TXMD will receive a 20-year royalty stream tied to Mayne
Pharma’s net sales of the products. The upfront payment to be made
by Mayne Pharma, along with cash on hand, will allow TXMD to repay
its outstanding indebtedness with Sixth Street Partners and to
redeem its outstanding preferred equity, with TXMD continuing as a
pharmaceutical royalty company with the potential to create value
for stakeholders over time from the resulting net cash flows.
"After completing a thorough evaluation of several strategic
alternatives, our Board of Directors concluded that this
transaction with Mayne Pharma would create the most value for
TherapeuticsMD’s stakeholders," said The Honorable Tommy Thompson,
Executive Chairman of TherapeuticsMD. “This transaction will allow
us to repay in full our debt to Sixth Street Partners and redeem
our preferred stock from Rubric Capital Management, while also
establishing a future royalty revenue stream for our common
shareholders. We believe that Mayne Pharma has the experience
necessary to fully realize the promise of our products as we work
together to improve patient care.”
Transaction Details
Under the terms of the transaction, TXMD will grant Mayne Pharma
an exclusive license to commercialize the Company’s Imvexxy®,
Bijuva®, and its prescription prenatal vitamin products sold under
the BocaGreenMD® and vitaMedMD® brands and will assign to Mayne
Pharma the Company’s exclusive license to commercialize Annovera®
(collectively, the “Products”) in the United States. In addition,
TXMD will sell to Mayne Pharma certain assets to allow Mayne Pharma
to commercialize the Products, including inventory.
Upon completion of the transaction, which is subject to
expiration or termination of the waiting period under the
Hart-Scott-Rodino Act of 1976, Mayne Pharma will be responsible for
development, regulatory filings, manufacturing, and
commercialization of the Products.
TXMD will receive an upfront payment of $140.0 million for the
sale of the assets and the grant of the licenses, plus a payment of
approximately $13.1 million for the acquisition of net working
capital, subject to certain customary adjustments.
In addition, Mayne Pharma will make one-time, milestone payments
to the Company of (i) $5.0 million if aggregate net sales of all
Products in the United States during a calendar year reach $100.0
million, (ii) $10.0 million if aggregate net sales of all Products
in the United States during a calendar year reach $200.0 million
and (iii) $15.0 million if aggregate net sales of all Products in
the United States during a calendar year reach $300.0 million.
Further, Mayne Pharma will pay to the Company royalties on net
sales of all licensed Products in the United States at a royalty
rate of 8.0% on the first $80.0 million in annual net sales and
7.5% on annual net sales above $80.0 million, subject to certain
adjustments, for a period of 20 years following the closing. The
royalty rate will decrease to 2.0% on a Product-by-Product basis
upon the earlier to occur of (i) the expiration or revocation of
the last patent covering a Product and (ii) a generic version of a
Product launching in the United States. Mayne Pharma will pay to
the Company minimal annual royalties of $3.0 million per year for
12 years, adjusted for inflation at an annual rate of 3%, subject
to certain further adjustments (cumulative ~$42.6 million).
In connection with entering into the transaction, the lenders
and administrative agent under the Company’s Financing Agreement
with Sixth Street Partners have agreed to extend the maturity date
of the Financing Agreement to December 31, 2022, allowing the
Company to complete the transaction with Mayne Pharma on or before
that date. The maturity date of the Financing Agreement may be
further extended to January 31, 2023, upon payment of an amendment
fee, in the event the definitive agreements in connection with the
transaction remain in effect and the waiting period under the HSR
Act has not expired or terminated.
The Company will retain its existing licensing agreements with
Knight Therapeutics, Inc. and Theramex HQ UK Limited.
The transaction is not subject to any financing conditions and
is expected to close at the end of 2022, pending satisfaction of
customary closing conditions.
Advisors
Greenhill & Co., LLC is serving as financial advisor and DLA
Piper LLP (US) is serving as legal counsel to TherapeuticsMD.
About TherapeuticsMD, Inc.
TherapeuticsMD, Inc. is an innovative, leading healthcare
company, focused on developing and commercializing novel products
exclusively for women. TherapeuticsMD’s products are designed to
address the unique changes and challenges women experience through
the various stages of their lives with a therapeutic focus in
family planning, reproductive health, and menopause management.
TherapeuticsMD is committed to advancing the health of women and
championing awareness of their healthcare issues. To learn more
about TherapeuticsMD, please visit https://www.therapeuticsmd.com/
or follow us on Twitter: @TherapeuticsMD and on Facebook:
TherapeuticsMD.
Cautionary Notes Regarding Forward Looking Statements
Certain statements in this communication, including, without
limitation, statements regarding the proposed transaction,
expectations with regard to the financial impact of such
transaction on the Company, future potential milestone and royalty
payments, plans and objectives, and management’s beliefs,
expectations or opinions, may contain forward-looking information
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements relate to future, not
past, events and often address expected future actions and expected
future business and financial performance. Forward-looking
statements may be identified by the use of words such as “believe,”
“will,” “should,” “estimate,” “anticipate”, “potential,” “expect,”
“intend,” “plan,” “may,” “subject to,” “continues,” “if” and
similar words and phrases. These forward-looking statements are not
guarantees of future events and involve risks, uncertainties and
assumptions that are difficult to predict.
Actual results, developments and business decisions may differ
materially from those expressed or implied in any forward-looking
statements as a result of numerous factors, risks and uncertainties
over which the Company has no control. These factors, risks and
uncertainties include, but are not limited to, the following: (1)
the conditions to the completion of the proposed transaction may
not be satisfied, and the possibility that if the agreements with
Mayne Pharma are terminated, it will constitute an event of default
under the Company’s Financing Agreement and the Company may not
continue as a going concern; (2) the parties’ ability to complete
the proposed transaction in the anticipated timeframe or at all;
(3) the occurrence of any event, change or other circumstance that
could give rise to the termination of the agreements between the
parties to the proposed transaction (including that if the
agreements are terminated it is an event of default under the
Company’s Financing Agreement and the Company may not continue as a
going concern); (4) the effect of the announcement or pendency of
the proposed transaction on business relationships, operating
results, and business generally; (5) risks that the proposed
transaction disrupts current plans and operations and potential
difficulties in employee retention as a result of the proposed
transaction; (6) risks related to diverting management’s attention
from ongoing business operations; (7) the outcome of any legal
proceedings that may be instituted related to the proposed
transaction; (8) the amount of the costs, fees, expenses and other
charges related to the proposed transaction; (9) the risk that
competing offers or acquisition proposals will be made; (10)
general economic conditions, particularly those in the life science
and medical device industries; (11) stock trading prices, including
the impact of the proposed transaction on the Company’s stock price
and the corresponding impact that failure to close the proposed
transaction would be expected to have on the Company’s stock price,
particularly in relation to the Company’s current and future
capital needs and its ability to raise additional funds to finance
its future operations in the event the proposed transaction does
not close; (12) the participation of third parties in the
consummation of the proposed transaction; and (13) other factors
discussed from time to time in the reports of the Company filed
with the Securities and Exchange Commission (the “SEC”), including
the risks and uncertainties contained in the sections titled “Risk
Factors” and “Cautionary Note Regarding Forward-Looking Statements”
in the Company’s most recent Annual Report on Form 10-K, as filed
with the SEC on March 23, 2022, and related sections in the
Company’s subsequent Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, all of which are available free of charge at
http://www.sec.gov or under the “Investors & Media” section on
the Company’s website at www.therapeuticsmd.com.
Forward-looking statements reflect the views and assumptions of
management as of the date of this communication with respect to
future events. The Company does not undertake, and hereby
disclaims, any obligation, unless required to do so by applicable
laws, to update any forward-looking statements as a result of new
information, future events or other factors. The inclusion of any
statement in this communication does not constitute an admission by
the Company or any other person that the events or circumstances
described in such statement are material.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221204005030/en/
Lisa M. Wilson In-Site Communications, Inc. 212-452-2793
lwilson@insitecony.com TherapeuticsMD 561-961-1900
IR@TherapeuticsMD.com
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