Lil’ Drug Store Grows With Acquisition Of Columbia Labs OTCs
This article was originally published in The Tan Sheet
Executive Summary
Lil' Drug Store will gain access to Columbia Labs' nonprescription women's healthcare products through the acquisition of the firm's OTC portfolio
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Lil' Drug Store will gain access to Columbia Labs' nonprescription women's healthcare products through the acquisition of the firm's OTC portfolio. Columbia Labs announced the deal's completion on June 30. The Livingston, N.J.-based company said it was divesting the OTC brands to focus on developing its prescription drug offerings. Lil' Drug Store acquired the worldwide rights to RepHresh vaginal gel and Advantage-S bioadhesive contraceptive gel, in addition to marketing rights for Replens vaginal moisturizer outside of the U.S. The firm previously purchased rights to market Replens in the U.S. in 2000. The new products build on Lil' Drug Store's existing line of OTCs, which include: Wartner wart removal system, Vaporizer in a Bottle cough/cold medicine, LegatrinPM pain reliever, Prodium urinary pain reliever and Kaolectrolyte electrolyte replenisher. Columbia Labs now will look to the commercialization of its "core" prescription drug business for long-term growth with treatments for infertility, dysmenorrhea, endometriosis and hormonal deficiencies. The company's products include Prochieve 8% and 4% progesterone gels and Striant testosterone buccal system for hypogonadism. While Columbia Labs builds up its prescription drug business, the firm will continue to receive revenue from Lil' Drug Store until 2009. Columbia will receive an initial upfront payment of just under $1 mil. In addition, the firm will generate cash from the manufacture and sale of OTCs to Lil' Drug Store as well as royalties and professional fees. As part of the transaction, the companies signed a five-year supply agreement. Columbia also will continue to have its direct sales force call on ob/gyns in the U.S. through 2006. Overall, the deal is expected to be valued at approximately $11 mil. Columbia cited its existing relationship with Lil' Drug Store as a primary reason for executing the deal. "This decision was based on their success in doubling U.S. sales of Replens over the past four years," CEO Fred Wilkinson said in a release. |