(Bloomberg) -- Teva Pharmaceutical Industries Ltd. agreed to sell its ParaGard intrauterine contraceptive device business to Cooper Cos. for $1.1 billion as the world’s largest maker of generic drugs works to reduce debt.
ParaGard is a product within the Israeli company’s global women’s health division, which it has been seeking to divest. The device had revenue of $168 million for the 12 months ended June 30, Teva said in a statement late Monday. The deal includes Teva’s manufacturing facility in Buffalo, New York, which produces ParaGard exclusively.
Teva said it is seeking the sale of the remaining parts of the women’s health business, as well as its oncology and pain units in Europe. It aims to generate a total of $2 billion in proceeds from the deals, as well as additional divestments to be made by year end.
The company is disposing of assets, closing down factories and cutting jobs in an effort to stabilize its financial footing. The drugmaker, with more than $30 billion in borrowings that exceed its market value, warned investors that it risks breaching its debt covenants this year if it doesn’t reap the expected $2 billion from the asset sales.
Teva shares soared 17 percent on Monday in Tel Aviv, its best on record, after it ended a seven-month search for a new leader and named named Kaare Schultz of H. Lundbeck A/S as its new chief executive officer to revive sales and reduce debt.
The stock had earlier plunged to the lowest since 2001 amid legal challenges to the company’s best-selling patented drug and price pressures on its generics. Last month, the company lowered its profit guidance and slashed its dividend.
Revenue from the women’s health portfolio -- which includes ParaGard and the Plan B One-Step emergency contraceptive pill -- has declined for at least three years in a row. It slumped to $458 million for 2016, and accounted for about 2 percent of the drugmaker’s overall sales, according to the annual report. Teva acquired ParaGard and Plan B through its acquisition of Barr Laboratories Inc. for $8.72 billion in 2008.
The ParaGard transaction is expected to close before the end of the year. Cooper, a medical-device company based in Pleasanton, California, said in a separate statement the deal will add 70 cents to 75 cents to its earnings per share in the first year.