TherapeuticsMD announced Sunday that it is selling licenses for its hormone therapy and contraceptive ring to Mayne Pharma Group for $140 million.
As part of the deal, TherapeuticsMD will grant Mayne exclusive license to commercialize Imvexxy and Bijuva, as well as prescription prenatal vitamin products sold under its BocaGreenMD and vitaMedMD brands. Mayne will also be granted exclusive license to commercialize Annovera in the U.S.
TherapeuticsMD added that it will sell certain assets to Mayne to commercialize, including inventory.
Terms of the deal stipulate that TherapeuticsMD will receive an upfront payment of $140 million for the sale of the assets and the grant of the licenses. The company will also receive a $13.1 million payment for the acquisition of net working capital.
Additionally, Mayne will make a one-time payment of $5 million if aggregate net sales of all products in the U.S. during the calendar year exceed $100 million, $10 million if sales exceed $200 million and $15 million if sales exceed $300 million.
As it relates to royalties, Mayne will pay TherapeuticsMD royalties on net sales of all licensed products in the U.S. at a rate of 8% for the first $80 million in annual net sales and 7.5% on annual net sales exceeding $80 million for 20 years following the closing.
That rate will decrease to 2% on a product-by-product basis if the expiration or revocation of the last patent covering a product or genetic version of a product launching in the U.S., whichever comes first.
TherapeuticsMD will retain existing licensing agreements with Knight Therapeutics, Inc. and Theramex HQ UK Limited.
The transaction is subject to customary adjustments and expiration or termination of the waiting period under the Hart-Scott-Rodino Act of 1976. The two sides expect the deal to close by the end of 2022.
“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,” The Honorable Tommy Thompson, Executive Chairman of TherapeuticsMD, said in a statement. “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.”