Houston-based Pernix Therapeutics Holdings announced on April 1st that it had reached an agreement to divest its Houston manufacturing operations, Pernix Manufacturing, LLC or PML to another pharmaceutical company, Florida-based Woodfield Pharmaceutical LLC.
According to RTT News, Woodfield will acquire the entire PML operation, assuming the mortgage associated with the facility. With this operation, Pernix expects to receive about $1.2 million in net proceeds at closing and realize about $5.0 million in annualized cost savings from the divestiture. The agreement implies that Woodfield will continue to manufacture the existing Pernix products under a long-term supply agreement.
In a statement, Pernix anticipates closing the transaction, which is subject to standard closing conditions and deliveries, on April 15th this year. In addition, closing on the sale of certain of the real estate assets may extend beyond the anticipated closing date.
Pernix’s statement did not specify the size of the facility being divested or whether any employees will be affected by the deal. “The sale of PML, along with the previously announced closure of our distribution centers in Madison, Miss., and Magnolia, Texas, continues our efforts to reduce and simplify our operating costs,” Doug Drysdale, president and CEO of Pernix, said in a statement. “The transaction will be a significant contributor to profitability in 2014. We sincerely appreciate the contributions the PML team has made as part of the Pernix family, and we look forward to working together with Woodfield to effect a smooth transition,” added Drysdale, who was named CEO in February.
Also in February, the company announced a new $65 million investment and two lawsuit settlements, which caused the company’s stock price to surge. In the past few months, Pernix has publicly struggled with poor earnings and made efforts to drive down expenses by reducing personnel and selling about $30 million worth of generic pharmaceutical assets. It also quietly moved its headquarters from a Woodlands corporate office to existing facilities in the Sugar Land area.