Shire PLC has sold a diabetic foot ulcer treatment to Organogenesis Inc. for future milestone payments.
The Irish drugmaker booked no upfront payment with the sale of the treatment, Dermagraft, but it said Friday it could receive up to $300 million in cash if Organogenesis meets certain sales targets between now and 2018.
Dermagraft is a living skin substitute approved for use in both the United States and Canada. Shire said Dermagraft's prospects have been reduced due to a recent Medicare ruling on reimbursement for the treatment.
Shire said it has been prioritizing investments "that are of the greatest strategic, clinical and commercial value," and Dermagraft no longer meets those criteria. Unloading it will allow the company to focus resources on other projects.
Shire will sell assets that had a value of $683 million as of Sept. 30. That includes patents, trademarks and some manufacturing equipment. The drugmaker will record a loss of about $650 million in the fourth quarter on the disposal and impairment charges, but that will be excluded from adjusted earnings.
U.S.-traded shares of Shire closed at $146.45 Thursday and have already advanced nearly 4 percent so far this year.