Teva to sell contraceptive brand Paragard in $1.1 billion deal

(Reuters) - Teva Pharmaceutical Industries TEVA.TA, TEVA.N on Monday agreed to sell its contraceptive brand Paragard to a unit of Cooper Cos COO.N for $1.1 billion, on a day the struggling Israeli drugmaker named industry veteran Kare Schultz as CEO.

FILE PHOTO: A building belonging to Teva Pharmaceutical Industries is seen in Jerusalem February 8, 2017. REUTERS/Ronen Zvulun/File Photo

The company’s U.S.-listed shares were up 1.4 percent at $18.75 in extended trading after closing up 19.3 percent in regular trading.

The sale of the business is the first step in the planned divestment of non-core assets and the proceeds would be used to repay term loan debt, Teva said.

Saddled with about $35 billion in debt, Teva has speeded up plans to divest non-core assets, Reuters reported last month, citing sources.

“Investors will like this news, as in addition to a good price for the asset, and the recent share decline has been likely due in part to investor worries that the debt burden is high,” Wells Fargo Securities analyst David Maris said in a note.

Teva’s U.S.-listed stock has halved since early August when it cut its forecasts.

The company said on Monday it continued to look for divestiture opportunities, including the sale of the remaining assets of its global women’s health business, as well as its oncology and pain businesses in Europe.

Teva said it expects to generate at least $2 billion in total proceeds from the sale of these businesses, as well as additional asset sales to be executed by the end of 2017.

The deal with Cooper includes Teva’s manufacturing facility in Buffalo, NY, which makes Paragard exclusively.

Paragard, an intrauterine copper contraceptive device, posted revenue of about $168 million for the year ended June 30.

Teva said it will continue to manufacture and sell Paragard in the United States, until the deal is completed, which is expected before the year end.

Earlier in the day, Teva named smaller peer Lundbeck's LUN.CO Chief Executive Schultz as its CEO.

Reporting by Shailesh Kuber; Editing by Arun Koyyur