Generic drug giant Teva Pharmaceuticals has agreed to sell the rights to its Paragard intrauterine device to Cooper Cos. for $1.1 billion as it continues to divest non-core assets.
Paragard, which is currently sold only in the U.S., generated $168 million in revenue for the 12 months ended June 30. According to Cooper, the U.S. market for IUDs is now worth about $1 billion, with expected growth in the mid-single digits.
As part of the deal, Cooper is also acquiring the Buffalo, N.Y., plant where Teva produces Paragard.
The acquisition “will expand CooperSurgical’s business in a large and growing segment of the contraceptive device market,” Cooper CEO Robert S. Weiss said in a news release. “CooperSurgical will now offer the only IUD on the U.S. market that is hormone-free, long-lasting and reversible.”
Teva said it continues to expect to generate at least $2 billion in total proceeds from the sale of the remaining assets of its global women’s health business, its oncology and pain businesses in Europe, and additional assets by the end of the year.
The sale of Paragard “emphasizes our commitment to divest non-core businesses to ensure that Teva is even more focused and efficient in this rapidly changing and highly-competitive environment,” interim CEO Dr. Yitzhak Petersburg said in a news release.
The Israel-based company has been divesting assets to pay down debt while focusing on its central nervous system and respiratory drugs. Its Copaxone medicine is the leading therapy for multiple sclerosis in the U.S. and globally.
Paragard is a copper-releasing IUD that prevents pregnancy for up to 10 years. Non-hormonal IUDs account for about 16% of the U.S. market, with Paragard being the only approved product in the space.
The acquisition is expected to be accretive to Cooper’s gross and operating margins, adding about $0.70 to $0.75 cents per share to earnings in year one.
“This is also a perfect strategic fit as it leverages CooperSurgical’s longstanding, strong relationships with gynecologists,” Weiss said.