Perrigo explores sale of royalties of drug Tysabri: sources

Fri Sep 16, 2016 4:52pm EDT
 
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By Carl O'Donnell

(Reuters) - Perrigo Company Plc PRGO.N, the manufacturer of generic drugs and over the counter medicines targeted by activist investor Starboard Value LP, is exploring a sale of the royalties from its multiple sclerosis drug Tysabri, people familiar with the matter said.

The royalty divestment is one of the actions that Starboard called for on Monday when it disclosed a 4.6 percent stake in the company and complained about its sagging stock price.

Perrigo had been exploring selling Tysabri royalties before Starboard's proposals, the people said on Friday. Royalty Pharma, a privately held company that specializes in acquiring drug royalties, is one of the potential acquirers, the people added.

There is no certainty that the process will lead to a sale, they said.

The sources asked not to be identified because the matter is not public. Perrigo declined to comment, while Royalty Pharma did not immediately respond to a request for comment.

In a letter to the Dublin-domiciled company on Monday, Starboard also asked for a sale of its prescription pharmaceutical business.

Perrigo's Chief Financial Officer Judy Brown said at a Bank of America healthcare conference on Thursday that the company's strategic portfolio review was under way to decide which assets are non-core and could be divested.

"The one asset that we can comment on that is non-core by a fairly objective definition is our Tysabri royalty stream, but it is a fantastic contributor to the overall financial performance and financial metrics of the business. But a royalty is not in and of itself a core business per se," Brown said.   Continued...

 
Birds are seen on the logo of generic drugmaker Perrigo Co outside their new factory in the city of Yeruham, in southern Israel March 2, 2016. REUTERS/Amir Cohen