Drugmaker TherapeuticsMD is selling its drug portfolio to Australia’s Mayne Pharma after a deal to be taken private fell apart this summer.
The Boca Raton, Fla-based company was set to sell itself to the private equity firm EW Healthcare Partners for about $177 million. But the buyout unraveled in July when only 30% of the company’s shares were tendered in support of the acquisition, falling short of the required total.
After the deal was terminated, TherapeuticsMD said it would maintain business as usual. Now, the company is licensing out its drug products and announcing a pivot to become a “pharmaceutical royalty company.”
"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 TherapeuticsMD’s board chair Tommy Thompson in a statement.
Per deal terms, Mayne will acquire rights to TherapeuticsMD’s prescription drugs Imvexxy and Bijuva, hormonal drugs approved in the U.S. for painful sex due to vaginal atrophy and moderate-to-severe hot flashes after menopause. Mayne will also gain TherapeuticsMD’s license to sell in the U.S. the birth control ring Annovera, which was approved in 2018.
In return, TherapeuticsMD will receive $140 million upfront, as well as another $13 million for related capital assets. The deal could also pay out more if certain milestones are reached, and grants TherapeuticsMD royalty rights on net product sales in the U.S. for 20 years.
None of the products TherapeuticsMD is giving up are big sellers, earning the company about $68 million in net revenue over the first nine months of 2022. But the upfront cash from the deal will allow TherapeuticsMD to repay debt it owes to Sixth Street Partners and redeem preferred stock from Rubric Capital Management.
TherapeuticsMD plans to become a royalty rights company after the deal closes, which is expected by the end of the year.