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news.Biovail, a specialty pharmaceutical company, has acquired Prestwick Pharmaceuticals, a privately held, US-based pharmaceutical company that holds the Canadian and US licensing rights to Xenazine, which was recently approved by the FDA for the treatment of chorea associated with Huntington's disease.
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Under the terms of the agreement, Biovail has paid $100 million to acquire 100% of Prestwick Pharmaceuticals and related license rights. Beyond Xenazine, the acquisition also provides Biovail with other early-stage products, including Lisuride Sub Q (advanced Parkinson’s disease), Lisuride Patch (Parkinson’s disease) and D-Serine (schizophrenia).
Biovail will commercialize tetrabenazine tablets in Canada (marketed under the Nitoman brand name) through the Biovail Pharmaceuticals Canada sales force. Biovail will pay a variable supply price that ranges from 50% to 67% of net sales to Cambridge Laboratories (Ireland), the worldwide license holder of tetrabenazine.
Prestwick has recently entered into an exclusive agreement with Ovation Pharmaceuticals, a specialty biopharmaceutical company, to commercialize Xenazine in the US. Following Biovail’s acquisition of Prestwick, Biovail will supply the product to Ovation for a variable percentage of the product’s annual net sales.
For net sales up to $125 million, Biovail’s supply price will be 72% of net sales. Beyond $125 million, Biovail’s supply price will be 65% of net sales. At both tiers, Biovail will pay a supply price of 50% of net sales to Cambridge.
Ovation will market Xenazine to US specialists through a 48-person sales force, which already markets a number of other products targeting CNS disorders, including epilepsy and attention deficit disorder. As part of the agreement, Biovail holds an option to co-promote Xenazine in the US. Should this option be exercised, Biovail has the right to utilize Ovation’s existing infrastructure to assist in the recruitment, training and operational management of a sales force. The product’s commercial launch is anticipated later in 2008.
In addition, Biovail holds an option to develop future related products with Ovation for the US market in conjunction with Cambridge. The transaction is expected to be accretive to both earnings per share and cash flows in 2009.
Bill Wells, CEO of Biovail, said: “The transaction meets all of our acquisition criteria, and represents Biovail’s first commercial exposure to specialty markets in central nervous system, or CNS disorders. The acquisition is another important step in the implementation of our new strategic focus.”