TherapeuticsMD enters agreements to license products to Mayne Pharma

TherapeuticsMD announced that it has entered into definitive agreements to license its products to an affiliate of Mayne Pharma for commercialization in the United States. In addition, TherapeuticsMD has agreed to sell certain assets to Mayne Pharma to allow Mayne Pharma to commercialize the products. At closing of the transaction, TherapeuticsMD will receive an upfront cash payment of $140.0 million for the license grant and sale of certain assets, plus an additional approximately $13.1 million, subject to customary adjustments, for acquired net working capital. In addition, TherapeuticsMD will receive a 20-year royalty stream tied to Mayne Pharma’s net sales of the products. The upfront payment to be made by Mayne Pharma, along with cash on hand, will allow TherapeuticsMD to repay its outstanding indebtedness with Sixth Street Partners and to redeem its outstanding preferred equity, with TherapeuticsMD continuing as a pharmaceutical royalty company with the potential to create value for stakeholders over time from the resulting net cash flows. Under the terms of the transaction, TherapeuticsMD will grant Mayne Pharma an exclusive license to commercialize the company’s Imvexxy, Bijuva, and its prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands and will assign to Mayne Pharma the company’s exclusive license to commercialize Annovera in the United States. In addition, TherapeuticsMD will sell to Mayne Pharma certain assets to allow Mayne Pharma to commercialize the Products, including inventory. Upon completion of the transaction, which is subject to expiration or termination of the waiting period under the Hart-Scott-Rodino Act of 1976, Mayne Pharma will be responsible for development, regulatory filings, manufacturing, and commercialization of the Products. In connection with entering into the transaction, the lenders and administrative agent under the company’s Financing Agreement with Sixth Street Partners have agreed to extend the maturity date of the Financing Agreement to December 31, 2022, allowing the company to complete the transaction with Mayne Pharma on or before that date. The maturity date of the Financing Agreement may be further extended to January 31, 2023, upon payment of an amendment fee, in the event the definitive agreements in connection with the transaction remain in effect and the waiting period under the HSR Act has not expired or terminated. The company will retain its existing licensing agreements with Knight Therapeutics and Theramex HQ UK Limited. The transaction is not subject to any financing conditions and is expected to close at the end of 2022, pending satisfaction of customary closing conditions.