Vistin hands partner its opioid, CMO businesses
- Norwegian drug developer Vistin Pharma is selling off the contract manufacturing side of its business to an Australian company specializing in narcotic raw material (NRM) production.
- TPI Enterprises has pledged NOK 100 million ($12 million) upfront to take control of Vistin's opioid and tablet manufacturing, which focuses on the active pharmaceutical ingredients (APIs) codeine phosphate hemihydrate and pholcodine. TPI also plans to purchase the remaining inventory of that API, which, as of March 31, was worth $7.5 million, according to a Tuesday statement.
- The deal's close is slated for early in the fourth quarter, at which point Vistin will operate solely as a manufacturer of metformin, a type 2 diabetes medication.
The pharmacuetical industry only has eight NRM suppliers worldwide. TPI Enterprises is one of them, and its business centers on the production of opium poppies.
The Aussie company has been eager to solidify its position in markets outside the land down under, with Europe being of particular interest. In addition to the deal with Vistin, TPI announced on July 11 it had signed another contract — its second — to create and sell codeine phosphate to a "leading" opioid drug distributor in the U.K.
The freshly inked contract means the company now manufactures 20% of the codeine phosphate consumed in the U.K., the largest closed market in the world for that drug, according to TPI.
"By supplying active pharmaceutical ingredients, such as codeine phosphate, in addition to its core narcotic raw material, TPI Enterprises is able to leverage its manufacturing cost advantage to open up new markets for its NRM production as the potential target customer base for opioid API is nearly five times as large as that for NRM alone," the company wrote in a July 11 statement.
Following those developments, TPI shares, which trade on the Australian stock exchange, shot up nearly 16% to AUD $2.55 ($1.97) apiece on July 12.
As for Vistin, offloading its opioids and CMO business provides cash to advance the metformin API production. The drug developer expects to reap between NOK 140 million to NOK 150 million ($16.9 to $18.2 million) in net cash from the deal, not including transaction costs.
"The sale of our opioids and CMO business allows the company to focus entirely on its core business, and strengthen our position as a leading global player in the growing metformin market," Vistin chairman Ole Enger said in a July 11 statement, adding that the deal gives his company a "very strong financial position, with significant investment and dividend capacity."
TPI and Vistin have linked up in the past as well. The duo had a strategic partnership for NRM sourcing — a familiarity that seems to have helped facilitate their latest transaction with one another. More than 50% of Vistin's shareholders have already put their support behind the deal, according to the company.
The deal is also timely given the state of the opioid pharmaceutical industry. With a full-scale prescription painkiller epidemic playing out in the U.S., opioid drugmakers and manufacturers have come under increased scrutiny from lawmakers and regulators.
Just last month, the Food and Drug Administration asked Endo Pharmaceuticals to take Opana ER, an extended release oxymorphone, off the market — a request the specialty drugmaker later honored. And earlier in the year, Mallinckrodt agreed to fork over $35 million to settle U.S. federal investigations claiming the St. Louis-based company didn't report "suspicious orders of controlled substances" over a roughly six-year period.
- Vistin Pharma ASA Press release
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