Vistin Pharma : Agreement To Sell Opioids And CMO Business - Extended Announcement

Published: Jul 13, 2017

Oslo, Norway, 13 July 2017

Reference is made to the stock exchange announcement on 11 July relating to the sale of Vistin Pharma ASA's ("Vistin Pharma" or "Company") opioids and tablet manufacturing business (CMO) (collectively, the "Business") to TPI Enterprises Limited (TPI). TPI will pay a cash consideration of NOK 100 million, as well as the value of inventory transferred at the date of closing. The inventory value at 31 March 2017 was NOK 62 million. The transaction will have a positive net cash effect of NOK 140 - 150 million, before any transaction costs.

Upon completion of the transaction, Vistin Pharma will be a pure play metformin producer, with a strong position in the global market and with significant growth ambitions. Metformin is used as the 1st line treatment of diabetes 2, a disease that is expected to grow by 50% towards 2030, and affect more than 500 million people. The global market for metformin is expected to grow by four to five percent per annum for many years to come and Vistin Pharma is attractively positioned to capture this growth.

The transaction

The transaction will be completed through a demerger of the Business from Vistin Pharma's subsidiary Vistin Pharma AS to a wholly-owned subsidiary of Vistin Pharma, TPI Norway AS ("TPIN"), and a sale of the shares in TPIN to TPI. Subject to the completion of the demerger of Vistin Pharma AS, and the transfer of the required production licence from the Norwegian Medical Agency to the demerged entity, the transaction is expected to be closed early in the fourth quarter of 2017.

The Business is currently not a separate legal entity, but forms two out of three business areas in Vistin Pharma AS. The board of Vistin Pharma AS consists of Kjell Erik Nordby, Gunnar Manum, Jørn Henning Isaksen and Åse Musum. The key management of Vistin Pharma is Kjell-Erik Nordby, Gunnar Manum, Valborg Godal Vold, Liesl Hellstrand, Hilde Merete Hagen and Erik Løkke-Øwre.

The Business has not been subject to separate financial reporting, however, the CMO business area, which forms part of the Business, has been a separate reporting segment within Vistin Pharma. Below are some key financial data for this segment:

(in NOKm) Q1 2017 Q1 2016 2016 2015*
Total revenue and income 27.5 30.4 122.3 68.9
Adj. EBITDA** 2.2 2.8 2.7** 4.4
Net assets 42.8 38.0 42.5 34.8

*The Company commenced operations on 1. June 2015
** EBITDA 2016 before redundancy provisions of NOK 5.8m

The opioids business area has not been subject to separate financial reporting, but has been part of the B2B segment of Vistin Pharma. The opioids business area had revenue of NOK 99.2 million in 2016 and revenue of NOK 26.4 million in the first quarter 2017.

The number of employees expected to transfer to TPIN is 94. The employment contracts for the employees who will transfer to TPIN through the demerger will not be affected by the transaction.

The CEO and CFO of Vistin Pharma have a bonus agreement as part of their remuneration, which is linked to the successful completion of the transaction. There are no other, nor are there expected to be any, agreements made that would benefit board members or other key personnel at Vistin Pharma as a result of the transaction. Vistin Pharma will enter into a transitional service agreement with TPIN for delivery of certain transitional services.

Rothschild & Co. is acting as financial advisor to Vistin Pharma.

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For further information, please contact:

Kjell-Erik Nordby
CEO
+47 91 36 42 80
kjell-erik.nordby@vistin.com

Gunnar Manum
CFO
+47 95 17 91 90
gunnar.manum@vistin.com

About Vistin Pharma

Vistin Pharma is a Norwegian pharmaceutical company producing Active Pharmaceutical Ingredients (APIs) and solid dosage forms for the global pharmaceutical industry. The Company has key positions in the Metformin and Opioids markets, and a strong foundation for creating a highly efficient Contract Manufacturing tablet production (CMO) business. Solid growth potentials exist in all the business segments.

With more than 65 years of pharmaceutical industry experience, Vistin Pharma has built significant capacity and expertise as an API provider. The Company has more than 140 highly qualified employees and two manufacturing facilities in Kragerø, Norway. Both facilities are certified according to current Good Manufacturing Practice (cGMP) and successfully inspected by the US Food and Drug Administration (FDA) in 2014. Vistin Pharma's headquarter is in Oslo, Norway.


This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

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