K-V Pharma sells generics unit to Zydus for $60 million

USA-based K-V Pharmaceutical (NYSE: KVa/KVb) has entered into a definitive agreement to divest Nesher Pharmaceuticals, its generics subsidiary, as well as the company’s generic business and assets to  Zynesher Pharmaceuticals, a US unit of India’s Zydus Cadila, for around $60 million in cash. The transaction is expected to close during the second quarter of KV’s 2012 fiscal year, subject to customary closing conditions.

The completion of this divestiture is an important element of the company’s declared strategy of transitioning to a branded specialty pharmaceutical company focused on women’s health, said K-V Pharma.

Nesher has expertise in niche therapies which have development or production barriers, such as controlled-release drugs or DEA-controlled substances, noted Zydus Cadila. The broad-based assets purchase agreement includes assets and assumption of certain liabilities, Nesher's existing and pipeline Abbreviated New Drug Applications (ANDAs), certain manufacturing facilities and an R&D laboratory. With this, Zydus will now be able to manufacture and distribute generic controlled substances in the US market, which otherwise cannot be imported. The market for controlled substances medications in the US is estimated at $7 billion.