GSK is selling U.S. rights to the migraine treatment Treximet® (sumatriptan/naproxen sodium) to Pernix Therapeutics Holdings, in a pair of deals that could net the pharma giant and a second company as much as a combined $322 million—while expanding its portfolio of CNS branded drugs.
The deals, announced today by Pernix, marks GSK’s second selloff of branded drugs in less than a month as it scrambles to reshape its product offerings. On April 22, GSK sold its cancer drug business to Novartis for up-to-$16 billion, though GSK also bought most of Novartis’ vaccine business for up to $7.1 billion.
For Pernix, the deals add Treximet to a CNS portfolio that grew earlier this year when the company agreed to co-promote the major depressive disorder drug Khedezla™ (desvenlafaxine) in the U.S. with Osmotica Pharmaceutical; the companies agreed to share profits. Pernix' portfolio additionally includes already includes the non-narcotic insomnia drug Silenor® (doxepin) as well as Cedax® (ceftibuten), an antibiotic for middle ear infections; and the prescription cough and cold remedies Zutipro®, Rezira®, and Vituz®.
“The acquisition of Treximet® further accelerates the transformation of Pernix into a specialty pharmaceutical company,” Doug Drysdale, Pernix’s chairman, president, and CEO, said in a statement."
“With the strong presence Pernix is establishing in the adjacent psychiatric market, this acquisition provides Pernix an opportunity to expand the company’s reach and penetration into the very important neurology space,” Drysdale added.
Pernix expects its deal with GSK to close no later than Aug. 1, following Hart Scott Rodino approval and closing of financing.Pernix said it will finance its deal through a combination of cash, debt and equity-linked or other securities.
Pernix agreed to pay GSK $250 million upfront for U.S. rights to Treximet, as well as a $17 million payment tied to receipt of an updated FDA written request for the drug’s first-ever indication in patients ages 12–17.
Also, Pernix agreed to pay Pozen royalties totaling 18% of net sales with quarterly minimum royalty amounts of $4 million for the 13 quarters starting January 1, 2015, and ending on March 31, 2018—at least $52 million.
GSK also agreed to assign to Pernix a product development and commercialization (PDC) agreement originally signed with Pozen. Treximet uses Pozen’s technology of combining a triptan with a non-steroidal anti-inflammatory drug (NSAID), as well as GSK’s RT Technology™.
Pernix said it will work with Poszen to facilitate further development, without offering details.
As part of the PDC deal, Pernix agreed to pay $3 million to CPPIB Credit Investments, and grant Pozen a warrant to purchase 500,000 shares of Pernix common stock at an exercise price equal to the closing market price on May 13, 2014. The warrants will be exercisable from the PDC deal’s closing date until February 2018.
Additionally, GSK will sell Pernix existing inventory in return for manufacturing Treximet in the near future under a supply agreement with Permnix for an undisclosed sum.
Treximet first won FDA approval in 2008 for treatment of acute migraine attacks in adults, with or without aura.
Treximet generated $78.7 million in net sales last year. Pernix reasons it can generate more through a staged relaunch of the drug with increased promotion, including a revised campaign for healthcare professionals and consumers, as well as marketing aimed at managed care and pharmacy programs.
Pernix estimates that its pro forma total company revenues will nearly double this year from the $10.3 million reported in 2013—then multiply much further, to exceed $230 million in 2015.
More than half of Pernix revenue last year ($6.3 million) came from royalties on Vimovo® (naproxen / esomeprazole magnesium), indicated for signs and symptoms of osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis, and to decrease the risk of developing gastric ulcers in patients at risk of developing NSAID-associated gastric ulcers.
In November, AstraZeneca sold U.S. rights to Vimovo to Horizon Pharma, but that deal still gives Pozen a 10% royalty on net U.S. sales, with guaranteed annual minimum royalty payments of $5 million in 2014, and $7.5 million each year thereafter—as long as the patents are still in effect and no generic versions are on the market.