Flamel To Sell Its Pessac Facility To Recipharm

(RTTNews) - Flamel Technologies (FLML) Friday said it agreed to divest its drug development and manufacturing facility at Pessac, France to Recipharm AB for 10.6 million euros.

Flamel said Recipharm will also invest 10.5 million euros in Flamel's stock in a separate transaction, at a purchase price equal to the trailing 20-day average price.

The Pessac facility is not currently used for the production of Flamel finished products, the company said, and Flamel intends to continue to outsource to third party contract manufacturing companies like Recipharm.

"Flamel's primary objective is the development of products using the company's proprietary drug delivery platforms," said Michael Anderson, CEO of Flamel. "The sale of the Pessac facility frees Flamel from the time-consuming task of running a contract development manufacturing facility."

As part of the sale of the Pessac facility, Recipharm will receive the royalty contract for Coreg CR with Glaxo SmithKline. Recipharm also gets an option to approach Flamel for rights of products that Flamel plans to license for sale in Europe.

In addition, Flamel said it has agreed to negotiate a contract with Recipharm under which the latter will incorporate Flamel's drug delivery technologies in its contract development business. Flamel will also enter into a 5-year service agreement with Recipharm.

Flamel said the transaction is due to close within 2014.