Biovail buys Cambridge Lab’s Huntington's disease drug
19 May 2009
The Canadian specialty pharmaceutical company, Biovail Corp, will acquire the worldwide development and marketing rights to the privately-owned Cambridge Laboratories (Ireland) Ltd's tetrabenazine products in a $230-million deal.
The portfolio of tetrabenazine includes Xenazine and Nitoman (tetrabenazine tablets).
In November 2008, Xenazine was launched in the US, where it has orphan drug status through August 2015 for the treatment of chorea associated with Huntington's disease.
The company last year acquired the Canadian and US licensing rights to Xenazine through its $100 million purchase of privately held Prestwick Pharmaceuticals Inc.
In Canada, Nitoman has been available since 1996 and is indicated for a number of hyperkinetic movement disorders, including Huntington's chorea, Tourette Syndrome and tardive dyskinesia.
Tetrabenazine is marketed through distribution agreements in a number of countries, including Australia, Denmark, France, Germany, Ireland, Israel, Italy, New Zealand, Portugal, Spain, Switzerland and the UK, with license applications pending in several European territories.
''This acquisition will be immediately accretive to revenues, margins and operating cash flows, and is expected to provide minimal operating cash flows in 2009 and in the range of $23 million to $26 million in 2010, said Bill Wells, chief executive officer of Biovail.
''Xenazine is showing strong commercial success in the US in treating chorea associated with Huntington's disease. By acquiring these worldwide rights, we believe we will be able to maximise the value of this asset in the near term for shareholders,'' he added.
Under the terms of the agreement, Biovail will make a payment of $200 million upon closing of the transaction and will pay an additional $30 million in two tranches over the subsequent 24 months to acquire the worldwide development, manufacturing, and marketing rights to the tetrabenazine product portfolio.
This includes a controlled-release formulation of tetrabenazine in development for Tourette Syndrome (BVF-018), as well as a tetrabenazine-derived new chemical entity (NCE), RUS350 - a next-generation molecule that may enter Phase 2 clinical development in the next 12 months.
In addition, Biovail will obtain a broad range of intellectual property for the product portfolio, including issued and pending patents.
The agreement enables Biovail to capture the gross margin earned by Cambridge on its supply of product for the US and Canadian markets. Biovail will assume a royalty obligation to a third party.
Tetrabenazine tablets in Canada are marketed under the Nitoman brand name by the Biovail Pharmaceuticals Canada. In the US, Biovail supplies Xenazine tablets to its commercialisation partner for a variable percentage of the product's annual net sales.
Tetrabenazine is a highly selective and reversible centrally-acting dopamine depleting drug that works by inhibiting a molecule known as vesicular monoamine transporter 2. The drug has been available in Europe for more than 30 years and in Canada since 1996.
Affecting an estimated 25,000 Americans, Huntington's disease is a devastating neurodegenerative disease that causes progressive movement disorders, cognitive dysfunction and behavioral changes.
