Alliance Pharma (LON:APH) has acquired the rights to Smith & Nephew‘s (NYSE:SNN) anesthetic gel Ametop for $7.5 million, according to the specialty pharmaceutical company.
The product, which Smith & Nephew has been selling in the U.K., Ireland, New Zealand and Canada for at least 10 years, is designed to numb a patient’s skin before an injection.
From Oct. 2016 to Oct. 2017, Smith & Nephew reeled in $2.8 million in sales for the product, mostly from the U.K. and Ireland.
The deal is being funded from existing cash and bank facilities, according to Alliance. The pharma company will acquire rights to Ametop, as well as inventory valued at $0.4 million.
“We are delighted to acquire Ametop, an attractive and established brand,” Alliance CEO John Dawson said in prepared remarks. “The acquisition will be immediately earnings enhancing, accretive to our underlying return on invested capital, and it fits well in our existing bedrock business operations.”
“The product is expected to add 2% to Alliance’s sales footprint in FY18E and while we make no changes to our forecasts at this stage, we could anticipate low single-digit earnings up-tick from the deal from FY18E onwards,” Numis Securities analysts wrote in a note to clients, Proactive Investors reported.
