Medivir sells unit for $100M to trigger biotech rebirth

Swedish flag

Medivir (STO:MVIR-B) has agreed to sell its commercial unit to Karo Pharma (STO:KARO) for SEK 908 million ($101 million) in cash. The deal pushes forward Medivir’s plan to shed its established drugs and emerge as an oncology-focused biotech.

Stockholm, Sweden-based Medivir committed to splitting its commercial and R&D units in August. At the time, the commercial business was expected to operate as a standalone company and list on the local stock exchange. Medivir rethought that plan after news of the split brought forward companies interested in buying the commercial unit. And, with Karo’s offer proving more tempting than going solo, Medivir has decided to sell up rather than list the business.

The deal, which is expected to close in December, frees Medivir from the specialty pharma business it bought in 2011 and returns it to its biotech roots. Those roots run deep. Medivir spun out of Astra, now AstraZeneca ($AZN), in 1988 and formed pacts with Bristol-Myers Squibb ($BMS), Eli Lilly ($LLY), Johnson & Johnson ($JNJ) and Roche ($RHHBY) down the years. But it is now some time since its pipeline has generated considerable excitement.

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Medivir is looking to its rebirth as a pure-play biotech to revive its fortunes. The company outlined its plans for the next chapter of its history last month when it axed 30 jobs as part of a retreat from early-stage research and infectious diseases, its historic area of specialization. Medivir 2.0 is focused on cancers including hepatocellular carcinoma, an indication in which it thinks its experience delivering drugs to the liver to treat hepatitis B and C gives it a foothold.

In doubling down on R&D, Medivir has taken the opposite path from the buyer of its commercial unit. Karo once sat alongside Medivir on the list of promising Swedish biotechs having landed deals with Merck ($MRK) and Pfizer ($PFE). But in recent years it has shifted gears, gradually offloading its pipeline programs while buying itself a portfolio of commercial assets. The deal with Medivir adds another 13 products to its roster.

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