BTG buys back CroFab and DigiFab rights

BTG, the specialty pharmaceuticals outfit, expects product revenue to be higher than expected this year after doing a deal to become the sole supplier of a pair of life-saving drugs from 1 October.

Nycomed US Inc's contract as the exclusive distributor of CroFab and DigiFab in the US expires on 30 September, but it's allowed to keep selling whatever supplies it has left for another six months.

BTG will pay Nycomed up to $16.6m (£10.3m) to fully re-acquire the exclusive rights to market and sell the drugs that treat patients with life-threatening digoxin toxicity or overdose, though it thinks the final payment will be about $14.5m (££9.3m).

Analysts at Piper Jaffray had only expected the firm to receive 50% of in-market sales for these products over the six months, but they believe the real value of today's deal is that it takes away any uncertainty and issues as regards to the handover of the actual marketing process.

"Also, with BTG having the full marketing process under its control as of 1 Oct., it's free to look for new products earlier. Thus, the main value of this deal is intangible," they wrote Tuesday.

The company now expects product revenues for the current financial year to be £93m-£97m, with the increase in revenue expected to flow directly into gross profit as full manufacturing costs have already been included in BTG's expectations.

The payments to be made under this agreement are estimated to result in an exceptional operating expense of around £9m in the current year's financial results.