Norway’s Vistin Pharma has agreed to sell its opioids and tablet manufacturing business (CMO) to Australia’s TPI Enterprises for 100 million Norwegian krone ($12.5 million). On the day of the deal’s closure, TPE will also pay a cash sum for the inventory transferred, which was 62 million Norwegian krone on Mar. 31.

“The sale of our opioids and CMO business allows the company to focus entirely on its core business and strengthen our position as a leading global player in the growing metformin market,” said Vistin Pharma’s chairman, Ole Enger, who added that the terms of the agreed sale put the company in a very strong financial position, with significant investment and dividend capacity.

Vistin Pharma’s two key opioid products are codeine phosphate (used in analgesics and cough syrup) and pholcodine (used in cough syrup). The CMO tablet manufacturing business produces finished products, with its main customer being leading Norwegian consumer health company, Weifa. Total revenue from the opioids and CMO business was 221.5 million Norwegian krone in 2016.

TPI is a manufacturer of narcotic raw material (NRM) and a strategic sourcing partner for Vistin Pharma, operating plants in Melbourne, Australia, and Lisbon, Portugal. It is one of just three licensed poppy processors in Australia and one of just eight processors worldwide producing NRM for the international pharmaceutical industry. TPE said it intends to invest a significant sum in Vistin Pharma’s plants in Gruveveien, Kragerø.

Vistin Pharma’s major shareholders, representing more than 50% of the group’s equity, are supporting the divestment, which is expected to complete early in the fourth quarter. The transaction remains subject to the completion of a demerger of Vistin Pharma to become a pure play metformin producer and the transfer of the production license from the Norwegian Medical Agency to the demerged group.

Metformin is the first line treatment for type 2 diabetes, which Vista Pharma said is expected to increase by 50% towards 2030. The company has a share of about 8% in the global metformin market currently and forecasts global demand to grow by 4-5% annually in the years ahead.

In August 2016, Vistin Pharma announced that it was spending 120 million Norwegian krone at Kragerø on doubling metformin capacity to 6,000 t/y. At the time of the announcement, the comapny said it was targeting a 15% share of the global metformin API market. The expanded capacity is due on stream in 2019.