UPDATE: Nordion sells TheraSphere business for $200M

Courtney Symons
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Nordion Inc. (NYSE:NDZ TSX:NDN) divested itself of one of the firm’s business divisions on Thursday with the $200 million sale of its TheraSphere technology to a healthcare company in the United Kingdom.

Nordion's Steve West. (Photo supplied)

BTG plc has acquired Nordion’s targeted therapies division, the sole product of which is the targeted liver cancer therapy called TheraSphere.

After taxes and associated costs, the local life sciences company expects to pocket $185 million from the transaction that is expected to close by the end of June.

In its most recent quarter, the firm’s targeted therapies division grew by nine per cent year-over-year, bringing in revenues of $12 million. The growth came from adoption in new clinics, a trend Nordion said it expected to continue in the second half of fiscal 2013.

“We’ve had (TheraSphere) for several years and it has come a long way,” said Tamra Benjamin, a spokesperson for Nordion. “It’s been successful and it’s certainly been growing. I’m sure if you talk to individuals in the company, it could be a little bittersweet for employees, but it’s a very good transaction for the business and it’s great for the employees.”

Approximately 40 Nordion staff members will join BTG to manage the TheraSphere business, most of them from the company’s Ottawa headquarters. Those workers will remain in Nordion’s local office for the next six to nine months until BTG can find another location for them in Ottawa, Ms. Benjamin said.

Nordion will continue to manufacture TheraSphere for the next three years, with the option of a two-year extension at BTG’s discretion.

The decision to sell the division was part of Nordion’s strategic review led by investment banking firm Jefferies & Co., which was announced in January and is ongoing.

“There’s no certainty this will result in any (additional) change in strategy, but we will be assessing further opportunities for the company,” Ms. Benjamin said of the strategic review.

The $200 million purchase price for the division that generated $48.5 million in revenues last year – up 14 per cent from 2011 – was satisfactory to Nordion, Ms. Benjamin said.

“We feel that it’s a fair value that provides good value for our shareholders and really supports our ongoing future objectives,” she said, adding that the transaction will allow Nordion to focus on its isotopes and medical sterilization business streams.

That’s a sentiment shared by Nordion CEO Steve West.

“We ... believe this transaction provides value for our shareholders and leaves Nordion with a focused specialty isotopes business,” Mr. West stated in a company release. “We intend to continue our strategic review process which includes an assessment of potential uses for the cash proceeds from this sale.”

BTG is an international specialist healthcare company that develops and commercializes products targeting critical care, cancer and other disorders, and is seeking to acquire new products to market to specialist physicians, according to the company.

The London, England-based company visited Nordion’s office on Thursday to present the news to employees alongside Nordion executives.

Ms. Benjamin said she expects the transition to take just under a year.

Nordion’s fiscal 2012 was plagued by arbitration and litigation fees incurred throughout the year during its legal battle with Atomic Energy of Canada Ltd.

The arbitration decision in September, which ruled against Nordion by a two-to-one margin, ended part of the three-year fight over the MAPLE nuclear reactors that AECL decided to mothball, citing a design flaw that Nordion argued was manageable.

But Nordion is still pursuing damages from the nuclear energy company – albeit 85 per cent less than it was originally seeking, in the amount of $243.5 million.

The local firm may also be on the hook for part of the $46 million in arbitration fees claimed by AECL. A decision on the matter will likely be made in the second quarter of fiscal 2013.

Organizations: BTG, Atomic Energy of Canada Ltd.

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