Osmotica Pharmaceuticals plc Closes Sale of Legacy Business to Alora Pharmaceuticals, LLC

Rhea-AI Summary

Osmotica Pharmaceuticals has successfully completed the sale of its legacy business, including US subsidiaries and its Marietta, Georgia manufacturing facility, to Alora Pharmaceuticals for approximately $111 million. This divestiture is a key strategic move to focus on UPNEEQ, the first FDA-approved treatment for acquired ptosis in adults. The proceeds will be used to significantly reduce the company's debt. CEO Brian Markison highlighted the intention to accelerate commercial growth for UPNEEQ and establish a new category in ocular aesthetics.

Positive

• Successful divestiture of legacy business for $111 million.
• Focus on UPNEEQ could lead to growth in ocular aesthetics.
• Use of proceeds to retire a substantial portion of outstanding debt.

Negative

• Dependence on UPNEEQ for future revenue generation.
• Risks associated with market acceptance of UPNEEQ.
• Ongoing impact of the COVID-19 pandemic on operations.

-- Divestiture advances Company's transformation and emphasis on eye care and ocular aesthetics --

-- Proceeds of the sale will be used to retire a substantial portion of outstanding debt --

BRIDGEWATER, N.J., Aug. 30, 2021 (GLOBE NEWSWIRE) -- Osmotica Pharmaceuticals plc (Nasdaq: OSMT) (“Osmotica” or the “Company”), a specialty pharmaceutical company, today announced that it has closed the previously announced sale of its legacy business, including certain of the Company’s US subsidiaries dedicated to the legacy business (Osmotica Pharmaceutical US LLC, Vertical Pharmaceuticals, LLC, Trigen Laboratories, LLC) and its Marietta, Georgia, manufacturing facility, to Alora Pharmaceuticals, LLC (“Alora”), effective August 27, 2021. The divestiture is central to the Company’s strategy to focus its efforts and resources on UPNEEQ, the first and only FDA-approved product for the treatment of acquired ptosis (droopy eyelid) in adults. The proceeds of the sale will be used to retire a substantial portion of the Company’s outstanding debt. Total closing proceeds received for the transaction were approximately $111 million, subject to customary post-closing adjustments.

“With the divestiture of our legacy business now complete, we can focus fully on accelerating the commercial expansion of UPNEEQ. Adoption and utilization of UPNEEQ has continued to grow among eye care professionals as we seek to create a new category in ocular aesthetics. This is an exciting time for the Company and for the brand, as we work to capture the full potential of this unique asset,” stated Brian Markison, CEO of Osmotica.

“Since the initial announcement of the acquisition, we have worked closely with the Osmotica, Vertical and Trigen teams to ensure a smooth transition of the businesses to the Alora family,” added Art Deas, CEO of Alora. “We look forward to growing the Vertical and Trigen line of products and expanding the production of the Marietta, Georgia facility.”

Barclays Bank PLC and Jefferies LLC acted as financial advisors, and Ropes & Gray LLP is acted as legal advisor to Osmotica. TAP Advisors acted as exclusive financial advisor, and Nelson Mullins Riley & Scarborough LLP acted as legal advisor, to Alora on the transaction. CIBC Bank USA arranged financing for the acquisition.

About Osmotica Pharmaceuticals
Osmotica Pharmaceuticals plc (Nasdaq: OSMT) is a specialty pharmaceutical company focused on the commercialization and development of products that target markets with underserved patient populations. RVL Pharmaceuticals, Inc. is the Company’s ophthalmic subsidiary supporting UPNEEQ^®.

Forward Looking Statements – Update as needed
This press release includes statements that express the Company’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” The Company’s actual results may vary significantly from the results anticipated in these forward-looking statements, which can generally be identified by the use of forward-looking terminology, including the terms “believes,” “expects,” “may,” “will,” “should,” “seeks,” “projects,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the use of proceeds from the sale of the Company’s legacy business and the Company’s strategy with respect to the continued commercialization of Upneeq and the creation of a new category in ocular aesthetics. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We may not achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place significant reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Important factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements include the following: the Company’s intended use of proceeds may change due to unforeseen factors; the Company’s dependence on Upneeq and the risk that it may fail to achieve market acceptance; the Company’s ability to develop and maintain its sales capabilities; risks related to our decision to dispense Upneeq exclusively through our wholly owned pharmacy; our ability to continue operations requires that we raise additional capital; the impact of the continuing COVID-19 pandemic; the Company’s ability to successfully develop or commercialize new products, or do so on a timely or cost effective basis; failures of or delays in clinical trials or other delays in obtaining regulatory approval or commencing product sales for new products; the impact of legal proceedings; the Company’s ability to service its substantial debt; the Company’s ability to raise additional capital; the impact of competition from both brand and generic companies; any interruption at the Company’s pharmacy or at facilities operated by third parties that the Company relies on for its products; the impact of any litigation related to allegations of infringement of intellectual property; the impact of any changes in the extensive governmental regulation that the Company faces; manufacturing or quality control issues that the Company may face; and other risks and uncertainties more fully described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 and other filings that the Company makes with the Securities and Exchange Commission. These forward-looking statements speak only as of the time of this release and the Company does not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

Investor and Media Relations for Osmotica Pharmaceuticals plc

Lisa M. Wilson
In-Site Communications, Inc.
T: 212-452-2793
E: lwilson@insitecony.com

FAQ

What is the significance of Osmotica Pharmaceuticals' divestiture on OSMT stock?

The divestiture allows Osmotica to focus on its core product UPNEEQ and retire a significant portion of its debt, potentially enhancing shareholder value.

How much did Osmotica Pharmaceuticals receive from the sale of its legacy business?

Osmotica received approximately $111 million from the sale of its legacy business.

What is UPNEEQ and why is it important for Osmotica Pharmaceuticals?

UPNEEQ is the first FDA-approved treatment for acquired ptosis in adults, pivotal for Osmotica's focus on ocular aesthetics.

What are the risks associated with Osmotica's dependence on UPNEEQ?

The risks include potential failure to achieve market acceptance and competition from other brands and generics.

When did the sale of Osmotica's legacy business take place?

The sale was completed on August 27, 2021.