Medicure Divests Specialty Pharma Unit for $105 Million

In July 2014, Winnipeg-based Medicure Inc. (TSX-V: MPH)(OTCQB: MCUJF) acquired a 6.09% equity interest in newly formed fellow specialty pharmaceutical companies Apicore LLC and Apicore US LLC, two companies collectively simply known as Apicore that would operate as subsidiaries of Medicure. Apicore is a developer and manufacturer of specialty drugs and over 100 active pharmaceutical ingredients, 16 of which are FDA approved, from it facilities in New Jersey and India.

During the quarter and six months ended June 30, 2017, Medicure generated $12.3 million of its $20.3 million in revenue and $14.0 million of its $29.0 million in revenue, respectively, from its Apicore business.

The ownership was first earned by Medicure for structuring a US$22.5 million interest purchase and financing of Apicore by several parties, including Knight Therapeutics (TSX: GUD) and included options for Medicure to purchase all of Apicore over three years. Subsequently, through additional transactions, Medicure increased its ownership in the New Jersey-based company to about 98 percent, taking out about C$60 million in loans in the process.

On Tuesday, Medicure said it was getting a return on its investment, selling its ownership of Apicore to an unnamed pharmaceutical company for net proceeds of US$105 million (C$131.32 million). Medicure is also eligible for additional payments over the next year and a half, including milestone payments for financial results and an earn out payment.

Medicure chief executive Dr. Albert Friesen says the company plans to use the cash from the sale to repay the loans related to the purchase, to move its own pipeline forward and potentially for the acquisition of commercial cardiovascular products.

Shares of MPH opened Tuesday trading by catapulting to a high of $9.20 from Monday’s close of $8.70, but have since slipped into the red, trading down a dime at $8.60 about two hours into the trading session.