Biovail Acquires Prestwick Pharmaceuticals
Biovail Corporation recently announced it has acquired Prestwick
Pharmaceuticals, Inc., a privately held, US-based pharmaceutical company
that holds the Canadian and US licensing rights to Xenazine (tetrabenazine
tablets). Xenazine was recently approved by the US FDA for the treatment of
chorea associated with Huntington’s disease. Xenazine was granted Orphan Drug
designation by the FDA, which provides the product with 7 years of market
exclusivity in the US.
Prestwick recently entered into an exclusive agreement with Ovation
Pharmaceuticals, Inc., a leading US-based specialty biopharmaceutical company,
to commercialize Xenazine in the US. The product’s commercial launch is
anticipated late 2008.
“We are delighted to have acquired Prestwick, and with it, an interest in
Xenazine, the first and only FDA-approved treatment for any symptom of
Huntington’s disease,” said Biovail Chief Executive Officer Bill Wells. “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.”
Under the terms of the agreement, Biovail has paid $100 million to acquire
100% of Prestwick Pharmaceuticals, Inc. 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) Ltd., the worldwide license holder
of tetrabenazine. 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.
Prestwick recently entered into an exclusive supply and marketing agreement
with Ovation Pharmaceuticals, Inc. for 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.
Xenazine was approved by the FDA on August 15, 2008, for the treatment of
chorea associated with Huntington’s disease, based on the results of a double-blind, placebo-controlled, Phase III study that found Xenazine significantly
reduced patients’ chorea burden, improved global outcome scores, and was
generally safe and well tolerated. Additional post-marketing preclinical studies
further elucidating the safety profile of the product will be conducted. Xenazine
has been available in Europe for more than 30 years and in Canada since 1996.
Biovail Corporation is a specialty pharmaceutical company engaged in the
formulation, clinical testing, registration, manufacture, and commercialization of
pharmaceutical products. The company is focused on the development and
commercialization of medicines that address unmet medical needs in niche
specialty CNS markets.
