Nordion's ($NDZ) constantly evolving business will soon be without proprietary pharma, as the company has agreed to ship out its targeted therapies business for $200 million.
The contract supplier is selling its sole drug product, the cancer treatment TheraSphere, to U.K.-based biotech BTG. Under the deal, which the company expects to close in June, Nordion will hand the drug over to BTG but ink a contract to keep manufacturing it for at least three years. After closing costs and other charges, Nordion expects to walk away from the deal with $185 million.
About 40 Nordion employees will transfer over to BTG when the deal's done, the company said, leaving Nordion with its contract supply and manufacturing business, focused on specialty isotopes.
"Given BTG's position as a leader in interventional medicine, we believe it is an ideal home for TheraSphere and the talented people that support it," CEO Steve West said in a statement. "... We intend to continue our strategic review process which includes an assessment of potential uses for the cash proceeds from this sale."
Last quarter, Nordion's supply and contracting business declined 3% to $25.2 million due to softening demand for medical isotopes, but contract manufacturing grew 6% thanks to the company's deal with GlaxoSmithKline ($GSK) to manufacture Bexxar.
TheraSphere was Nordion's fastest-growing product, accounting for about 20% of 2012's $244.8 million in revenue. Nordion is expecting its medical isotope revenue to decline in the mid-teen percentage range for fiscal 2013, so the company's contract manufacturing business is likely to become more and more important.
Earlier this month, Nordion signed a three-year deal with Navidea Biopharmaceuticals ($NAVB) to manufacturing an in-development imaging agent through the clinical trial process. The company will need more such agreements to grow revenue on the year, and Nordion may well spend some of its TheraSphere cash on acquisitions to expand its manufacturing capacity.
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