IDT to acquire 23 more generic drugs

IDT Australia (ASX:IDT) has arranged to acquire a portfolio of 23 marketed generic drug products for up to US$18 million ($20.7 million).

The company has entered a conditional agreement to acquire the drugs for an initial US$13.5 million.

The agreement also stipulates trailing payments of $4.5 million upon the meeting of regulatory and sales milestones. The identity of the seller or sellers has not been disclosed.

Announcing the arrangement, IDT said the product suite includes products for treating Parkinson’s disease, depression, infections, hypertension, pain and other conditions. All products are or have previously been approved by the US FDA as abbreviated new drug applications.

Upon acquisition, IDT plans to transfer manufacturing of the products into its Melbourne facilities. This will be the only step required for most products.

IDT is targeting product launches for the generic drugs in the first half of calendar 2016.

“This acquisition redefines the business of IDT as a manufacturer and supplier of its own range of specialty generic drugs,” IDT Australia CEO Dr Paul MacLeman said.

“IDT retains its contract manufacture and drug development services, but we envisage this deal should position IDT to materially increase the utilisation of its existing fixed plant and equipment as well as expanding margins.”

In November last year, IDT filed for approval to market a generic version of the now off-patent oral chemotherapeutic temozolomide, and announced that the company plans to add more products to its generic drug portfolio over the next 12-18 months.

IDT Australia (ASX:IDT) shares were trading 8% lower at $0.23 as of around 1.30 pm on Tuesday.