Actavis to divest Doryx brand to Mayne Pharma for $50 million

Ireland-headquartered generics major Actavis (NYSE: ACT) has entered an agreement with Australia-headquartered Mayne Pharma (MYX: ASE) to divest the US rights to the Doryx (doxycycline) brand acne treatment and related assets.

The deal is valued at approximately $50 million and is expected to close before the end of February. Actavis will continue to package, distribute and promote Doryx for a transition period until May 2. Mayne said it expects the product to contribute an average $2.7 million a month from July in earnings before interest, tax, depreciation and amortization.

William Meury, executive vice president of commercial on North American brands at Actavis, said: "Actavis currently licenses and distributes Doryx in the US as part of our legacy Warner Chilcott partnership with Mayne, which is eligible to expire at the end of 2015. By agreeing to return the product to Mayne now, we receive value for the asset and, following a brief transition period, will enable our sales and marketing teams to focus their time and attention on supporting the expanded, industry-leading Dermatology portfolio that will be part of our combined company following the acquisition of Allergan later this year. We are committed to investing in our expanded dermatology portfolio and in our R&D pipeline in this important category, and look forward to continuing to grow our business within Dermatology."