Agenix sells Milton subsidiary

Brisbane's Agenix [ASX:AGX, NASDAQ OTC:AGXLY] has sold its loss-making Milton Pharmaceuticals subsidiary to an unnamed buyer.

The company said the sale price achieved would require a further balance sheet write-down of approximately AUD$1.5 million against Milton's book value. The write-down will be included in the company's half-year result to December 31, 2004.

Milton is also expected to contribute an operating loss of about $600,000 to the company's half-year results.

Milton -- which employs around 90 staff and manufactures and distributes branded over-the-counter pharmaceuticals, traditional medicines and consumer products -- has been on the market since early 2003.

Last year, Agenix discontinued a number of the company's products, and the low-margin contract manufacturing side of the business. Agenix said this move reflected "increasing scrutiny of government regulators on the industry and the increased cost and complexity associated with maintaining a facility capable of manufacturing a wide range of scheduled products."

"Due to changes in the regulatory environment of the pharmaceutical industry in Australia, it became clear that Milton required substantial new investment and a large proportion of management time to reach critical mass and generate adequate returns," said Agenix managing director Don Home.

The purchaser of Milton Pharmaceuticals intends to relocate the business to Victoria..