A bankruptcy court judge in Newark has approved the sale of Aceto Corp.’s troubled generic drug unit for $15 million to an India-based drugmaker, officials said Friday.
Aceto, which is headquartered in Port Washington, said its Rising Pharmaceuticals Inc. in New Jersey will become part of Shore Suven Pharma Inc. later this month. The sale is expected to close on April 19.
Aceto CEO William C. Kennally III said Friday, “Today’s court approval brings closure to the sales process for Rising Pharmaceuticals’ customers and employees and paves the way for a seamless transition” to Shore, which is a joint venture of Suven Life Sciences Ltd., a public company in Telangana, India, and Aceto board director Vimal Kavuru, according to company documents.
In February, Aceto filed for bankruptcy protection from its creditors, citing mounting losses and a shortage of cash. Executives said at the time that Rising faced intense competition from rivals and had trouble delivering products.
The sale of Rising comes eight years after Aceto purchased the drug manufacturer for $80 million. It then enlarged Rising in December 2016 by purchasing some of the assets of two other drugmakers for $462 million.
Those drugmakers were run by Kavuru, who subsequently joined the Aceto board and helped to run Rising. He now will be CEO of Shore, officials said.
Aceto also has negotiated a deal to sell its chemicals division for $338 million to the private equity firm New Mountain Capital in Manhattan, subject to a court supervised auction. The chemicals are used primarily in agriculture and manufacturing.
That sale is expected to be completed by June 30.
Aceto shares began trading April 3 on the Over-The-Counter Pink Sheet Market after being delisted from the Nasdaq stock market.
As part of the bankruptcy filings and proposed sales, the company said it has secured $60 million in financing to keep operating and to pay its workforce of 315 people.