Alkermes to sell its Gainesville manufacturing plant

Recro Pharma, Inc., agreed Monday to pay Alkermes, PLC, an initial cash payment of $50 million as part of a deal to acquire Alkermes' Gainsville, Georgia, manufacturing facility and manufacturing and royalty revenue from products produced at the plant.

Recro also agreed to pay development and commercialization milestone payments of up to $120 million related to Meloxicam IV/IM and low digit nets sales of Meloxicam.

The transaction is expected to close in the second quarter of this year.
   
Assets included in the transaction include the Good Manufacturing Practices (GMP) facilities in Gainesville, the parental formulation of Meloxicam and Alkermes’ rights to Ritalin LA, Focalin XR, Verelan, Zohydro RD and Bidil.
   
“We are streamlining Alkermes’ manufacturing operations for our commercial products and late-stage pipeline into our two GMP facilities in Athlone, Ireland, and Wilmington, Ohio,” Alkermes Chief Financial Officer James Frates said. “With this transaction, we are capturing value from non-core assets, as we continue to execute on our strategy and focus on the key driver of our future growth – our late-stage pipeline of innovative medicines for central nervous system diseases.”

As a result of the transaction, Alkermes expects cash and total investments to increase by $50 million, revenues to decrease by approximately $40 million and the cost of goods manufactured to decrease by approximately $25 million.