Teva announces sale of Paragard for $1.1 billion

Shortly after the news that Teva had finally sealed the deal on a new CEO, it also announced that it had managed to sell its contraceptive brand Paragard for $1.1 billion. The deal represents a positive step for the company in raising the $2 billion it needs to pay down its debts for the financial year.

Paragard is part of Teva’s Women’s Health unit; the product is an intrauterine copper contraceptive that brought in revenue of $168 million last year. The purchaser is CooperSurgical, a US-based company, part of the larger The Cooper Companies, that supplies healthcare products for women.

The company announced that the sale would be part of a wider divestment that would include the rest of the Women’s Health unit, as well as the company’s oncology and pain businesses in Europe. Teva expects the combined sales from these units to "generate at least $2 billion"; its divestiture strategy will not be limited to these areas, as it suggested that it expects "additional asset sales to be executed by year end 2017".

"CooperSurgical’s commitment to women's health, fertility and diagnostics, will help to assure that patients in the U.S. continue to benefit from access to Paragard," stated Dr. Yitzhak Peterburg, Interim CEO. "This is an important step towards completing the divestments we have promised our stakeholders. Teva will use the proceeds from the sale to repay term loan debt under its Senior Credit Facility."

The sale of the business to CooperSurgical will also include the manufacturing facility, based in Buffalo, New York, that produces Paragard exclusively. The deal is expected to close before the end of the year, until which time Teva will continue to sell and manufacture the product.

The combined news of an incoming CEO and hitting a milestone on its way to paying down its debts has sent shares in Teva upwards for the first time in a long while, with the price soaring by close to 20% on the announcements.