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US drugmaker Perrigo said on Monday that it would sell the royalty rights of its multiple sclerosis drug to an affiliate of Royalty Pharma as it reported a preliminary loss for 2016 and said its chief financial officer had resigned.
New York-listed shares of Perrigo, which are up nearly 2 per cent so far this year, slumped 11 per cent to $75.60 in extended trading.
Perrigo said it would divest royalty rights from Tysabri in a transaction of up to $2.85bn — with $2.2bn in cash at closing and up to $650m in “milestone payments” based on future global net sales of the drug in 2018 and 2020. The transaction is expected to close in 30 business days, subject to certain conditions, and Royalty Pharma will have the rights to receive royalty payments from January 1, 2017.
The news comes after activist investor Starboard disclosed a stake in the company in September. It has pressed for the drugmaker to make changes to “reverse the trajectory of poor operating and financial performance” and urged it to consider divesting its prescription drug business and the royalty rights to Tysabri.
Dublin-based Perrigo also said that Ron Winowiecki has been appointed its acting chief financial officer effective immediately, as the company conducts a search for a permanent CFO following the resignation of Judy Brown. Meanwhile, Svend Andersen has been appointed executive vice president and president of the Consumer Healthcare International division.
The news accompanied 2017 full-year earnings outlook in the range of $6.30 to $6.65 a share and sales in the range of $5bn – $5.2bn
It also unveiled preliminary loss in the range of $28.85 to $29 a share in 2016. However it estimated adjusted earnings in the range of $7.10 to $7.25 a share, above its previous estimates of $6.85 to $7.15 a share. The company is delaying the filing of its 10-K until March.