When Impax CEO Paul Bisaro started cutting costs at the financially struggling drug company, one move involved the “difficult decision” to let go of its once-troubled manufacturing site in Taiwan. Impax now has a buyer for the facility.
The 400,000 square-foot plant is being sold to Taiwan-based Bora Pharmaceuticals, which will pay Impax $18.5 million. Impax will take a Q4 2017 impairment charge of between $70 million and $80 million on the deal.
Bridgewater, New Jersey-based Impax also struck a supply agreement for Bora to produce some Impax products at the Taiwan facility, most importantly its Parkinson’s drug Rytary. Bora also got rights to sell Rytary in Taiwan. The deal is expected to close this quarter.
"This agreement accelerates the benefits we expect to receive as part of our cost improvement program and allows us to achieve a full run rate of cost savings across all program initiatives by the end of 2018, one year ahead of schedule," said Bisaro in a statement. "Through this agreement, Impax gains a high-quality contract manufacturing partner with expertise in manufacturing for multinational pharmaceutical companies. The deal also aligns nicely with Bora's international growth and expansion plans."
Bisaro took over as CEO of Impax last year shortly after stepping down from Allergan, which he had acquired as part of an M&A run in which he built Actavis from a small generics operation into a large branded player.
Impax had already been through two CEO changes at that point as it struggled with manufacturing issues for several years while worked to get Rytary approved. It has since overcome the problems at the Taiwan plant as well as its manufacturing facility in Hayward, California.
Rytary was approved in 2015, but cost issues persisted and Bisaro was hired to work his magic. After first undertaking a cost-cutting program in which Impax consolidated much of its manufacturing at Hayward and slated the Taiwan plant for disposal, he focused on M&A.
In November, he struck a $6.4 billion deal to merge Impax with Paterson, New Jersey-based generics maker Amneal. Impax shareholders get 25% of the new company—which will take Amneal’s name and have an expected value of $6.4 billion. Bisaro said there also is ample cost-cutting opportunity, with the companies expecting to wring out $200 million in the first year.