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Item 2.01
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Completion of Acquisition or Disposition of Assets.
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On March 27, 2017, Perrigo Company plc (the “Company”), through its wholly-owned subsidiary Perrigo Pharma International Designated Activity Company (“Perrigo DAC”), completed the divestiture of its rights to the royalty stream from global net sales of the multiple sclerosis drug Tysabri
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(natalizumab) to RPI Finance Trust, a Delaware statutory trust (“RPI”), pursuant to the Purchase and Sale Agreement, dated February 27, 2017, by and among the Company, Perrigo DAC, and RPI (the “Agreement”). RPI is an affiliate of Royalty Pharma.
Pursuant to the Agreement, Perrigo DAC sold RPI all of its rights under the asset purchase agreement, dated February 5, 2013, by and among certain Perrigo affiliates and Biogen International Holding Ltd. (f/k/a Biogen Idec International Holding Ltd.) (the “Original Asset Purchase Agreement”) to receive royalty payments in respect of worldwide net sales of Tysabri
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made on or after January 1, 2017.
RPI paid Perrigo DAC $2.2 billion in cash at closing, and agreed to make additional milestone payments to Perrigo DAC of (a) $250 million if the Tysabri
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royalty amounts payable pursuant to the Original Asset Purchase Agreement for the twelve months ended December 31, 2018 meet specified thresholds and (b) $400 million if the Tysabri
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royalty amounts payable pursuant to the Original Asset Purchase Agreement for the twelve months ended December 31, 2020 meet specified thresholds.
Additionally, Perrigo DAC assigned to RPI certain information and audit rights under the Original Asset Purchase Agreement related to the Tysabri
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royalties. The Agreement also provided for the allocation of certain obligations of Perrigo DAC under the Original Asset Purchase Agreement and contained various representations and warranties, covenants, indemnification obligations and other provisions customary for transactions of this nature. The Company has provided a limited guarantee of Perrigo DAC’s obligations under the Agreement.
The foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 28, 2017, and is incorporated herein by reference.
Further to previous disclosure, the Company and its independent auditor, Ernst & Young LLP (“E&Y”), have not yet been able to fully complete their respective reviews of the historical revenue recognition practices associated with the Tysabri
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royalty stream. As a result, the Company has not yet released audited financial statements for the fiscal year ended December 31, 2016, or filed its Annual Report on Form 10-K for that fiscal year. Accordingly, it is not practicable for the Company to prepare and file pro forma financial information relating to the completed Tysabri
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royalty stream divestiture at this time.
E&Y, together with the Company’s full cooperation, is focused on completing its audit procedures, including the previously-discussed scope of work related to the review of the deferred tax assets and other related effects at Omega Pharma Invest N.V., to enable the Company to file its Annual Report on Form 10-K as soon as practical. The Company expects to file an amendment to this Current Report on Form 8-K to file the pro forma financial information required by Article 11 of Regulation S-X as soon as practicable after its Annual Report on Form 10-K is filed.