Oculus Innovative Sciences (OCLS) Sells Latin America Business for Over $19.5M
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Oculus Innovative Sciences, Inc. (NASDAQ: OCLS), a specialty pharmaceutical company that develops and markets solutions for the treatment of dermatological conditions and advanced tissue care, today announced the sale of the company’s Latin American-related assets to Invekra S.A.P.I. de C.V. of Mexico for $19.5 million in cash. Additionally, Invekra will pay Oculus a three percent payment on all Latin American revenues outside of Mexico, with a minimum payment of $250,000 per year for the next ten years, to be paid quarterly in Mexican pesos.
According to the agreement, Oculus will sell all its Latin American assets related to the Microdacyn®-based products sold into Latin America and the Caribbean (except for dermatology products in Brazil). In exchange, Invekra will pay Oculus $19.5 million, with $18 million already paid as of October 28, 2016, and $1.5 million to be placed in escrow until certain equipment is delivered to Invekra, which is expected in February 2017. As part of the agreement, Oculus will maintain its current manufacturing facility in Guadalajara, Mexico for production of its Oculus-branded Microdacyn-based products for all countries outside of the United States and Latin America. Meanwhile, Oculus will provide assistance and equipment in the establishment of Invekra’s own Microdacyn manufacturing facility in Mexico City’s metropolitan area.
Jim Schutz, CEO of Oculus, said, “We genuinely see this as a strategic opportunity to focus on our growing dermatological business. From Invekra’s perspective, they are acquiring guaranteed exclusivity in the Latin American market for our Microdacyn family of products, thus controlling their own destiny and reaping the full rewards from their marketing spend. From Oculus’ perspective, we are selling a slower growing, lower-margin segment of our business in exchange for a significant influx of immediate cash, allowing us to further advance our higher-margin, fast growing U.S. dermatology business. In addition, the proceeds from this deal provide us with more than sufficient capital for us to reach commercial breakeven and achieve operating profitability.”
Business Update Conference CallOculus’ management will hold a business update conference call on Tuesday, November 1, 2016 beginning at 9:00 am. EDT to discuss the Invekra agreement. Individuals interested in participating in the conference call may do so by dialing (877) 303-7607 for domestic callers or (973) 638-3203 for international callers.
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