Summary
Quest Diagnostics Incorporated (DGX) announced on July 18, 2013, the completion of the sale of its royalty rights to the drug candidate ibrutinib for $485 million in cash. This strategic divestiture is part of the company's ongoing effort to refocus on its core diagnostic business and drive shareholder value. The sale is expected to yield approximately $300 million in after-tax cash proceeds. The ibrutinib royalty rights were originally acquired as part of the 2011 acquisition of Celera. While this specific asset is being sold, Quest Diagnostics retains royalty rights to other clinical indications stemming from Celera's drug assets, including programs targeting HDAC, selective HDAC enzymes, Factor VIIa, and other BTK compounds, as well as intellectual property related to odanacatib. These retained rights pertain to drugs currently not yet commercialized, and no royalty payments have been received on these programs to date.
Key Highlights
- 1Completed sale of ibrutinib royalty rights for $485 million in cash.
- 2Expected after-tax cash proceeds of approximately $300 million.
- 3Gain from sale to be recorded in Q3 and excluded from adjusted earnings.
- 4Proceeds to be used to drive shareholder value, consistent with capital deployment strategy.
- 5Ibrutinib rights were acquired via the 2011 acquisition of Celera.
- 6Quest Diagnostics retains royalty rights to other Celera-derived drug assets, none of which are commercialized.
- 7This sale aligns with the company's strategy to refocus on its core diagnostic business.