Alliance Pharma acquires AstraZeneca antimalarial brands

UK-based specialty drug firm Alliance Pharma (AIM: APH) has acquired the antimalarial brands Paludrine, Avloclor and Savarine from Anglo-Swedish drug major AstraZeneca (LSE: AZN). The acquired products are sold mainly in the UK and France.

Alliance expects the acquired products to generate incremental contribution before financing costs of around £1.1 million ($1.7 million) per annum. Alliance is paying a £4.2 million initial consideration to AstraZeneca UK and may pay a further sum over the next three years, which is not expected to exceed £1.0 million, dependent on sales of the brands.

The initial consideration is being funded from existing cash and bank facilities, including a £2 million drawdown from the group’s £20 million revolving credit facility, and any deferred consideration will be funded from future cash generation. This will bring the utilisation of the RCF to £8.5 million.