Revolymer plc (LON:REVO) announced that it had committed to divest its nicotine gum business to Danish firm Alkalon.
Alkalon has EU regulatory approval for its products and an established European customer base, which the group expects to fit well with its existing Canadian customer base.
Revolymer listed in 2012 in order to further develop the commercialisation of its nicotine gum, so the announcement comes as a change in direction for the group.
"This transaction marks further progress in the execution of Revolymer's strategy, focusing its business on becoming a leader in functional polymers,” said chief executive Kevin Matthews.
“We therefore believe that the transaction will have a positive commercial impact on Revolymer's business."
Completion is subject to the satisfaction of certain customary conditions, including the transfer of key customer contracts and the Canadian product licence to Alkalon. The consideration is valued at equivalent to £0.9mln.
House broker Panmure Gordon reiterated its “buy” rating and target price of 70p, indicating around a 95% upside from its current share price of 36p.