Alliance Pharmaceuticals Limited, a wholly owned subsidiary of Alliance Pharma, has purchased all the existing rights to obstetric drug Syntometrine from Novartis for $11.5m.
The total consideration for acquiring the rights will be funded from existing cash and bank facilities, including a £3.5m drawdown from the group's £30m acquisition facilities.
About $0.3m inventory will also be purchased by the company, besides taking over the overseas rights to Syntometrine.
Alliance Pharma chief executive John Dawson said, "Although there will be some costs of operating the new distributorships, the acquisition will be immediately earnings enhancing and it fits well with our strategy of increasing Alliance's international sales."
The company is expecting £0.5m of annual distribution and operating costs associated with the new territories.
The obstetric drug, which is used in the final stage of labor, is already being sold by Alliance in the UK for the past several years.
Currently, Syntometrine is sold by Novartis and its affiliates in a number of countries worldwide, including Australia, South Africa, Malaysia and New Zealand.
Novartis recorded $3.2m in total sales of Syntometrine and the gross margin generated was $2.8m, in the 12 months to March 2013.
