PDL BioPharma has announced that PDL has completed an initial equity investment of $75 million in Noden Pharma DAC (Noden), a new privately-held company domiciled in Ireland, and an affiliate. Noden today announced that it closed its transaction relating to a purchase agreement with Novartis AG (Novartis) to acquire exclusive worldwide rights to manufacture, market, and sell the branded prescription medicine product sold under the name Tekturna® and Tekturna HCT® in the United States and Rasilez® and Rasilez HCT® in the rest of the world. The product's active ingredient is aliskiren, which is indicated for the treatment of hypertension. The drug was previously marketed by Novartis and had global sales in 2015 of $154 million. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act applicable to the acquisition has expired, fulfilling the last remaining condition to close the transaction. PDL's investment will ultimately result in an 88 percent equity interest in Noden. Given this anticipated majority ownership by PDL, the financial statements of Noden will be consolidated with PDL, which is expected to be immediately accretive to PDL's cash earnings.
"We are pleased to announce the closing of this equity investment transaction with Noden and believe that this transaction represents a paradigm shift for us. While we'll continue to build on our portfolio of income generating assets, our investment in Noden provides another platform for value creation," stated John P. McLaughlin, president and chief executive officer of PDL. "We are already in discussions about additional specialty pharma assets that Noden could acquire."
PDL expects to make equity contributions to Noden totaling $107 million in the first year of the transaction, which includes the initial equity investment of $75 million and an additional $32 million equity contribution commitment which will be made on the one-year anniversary of the closing of the transaction. In addition, PDL provided Noden with a loan and loan commitments of up to an aggregate of $75 million, which PDL expects will be repaid in the next 60 days once Noden secures a debt facility from a third party. PDL also may contribute additional amounts of funding depending on the total amount of debt obtained by Noden, and as needed for specified milestone payments or other purposes. PDL will have three of the five seats on Noden's board of directors.
Novartis will continue to distribute the products during the period of transfer of marketing authorizations from Novartis to Noden, which will occur not later than 90 days in the U.S. and as quickly as possible in the European Union and rest of world. Novartis has also agreed to supply the product for a fixed period of time while a transfer of manufacturing technology is implemented to a third party contract manufacturer.