Akzo Nobel of the Netherlands says that its pharmaceutical unit Organon’s co-promotion agreement with Johnson & Johnson’s Janssen-Cilag for the latter firm’s antipsychotic drug Risperdal (risperidone) has been terminated. The two companies have collaborated on marketing the product since 1993 in Europe, Argentina and Brazil.
The reason for the termination, through which the Dutch group will receive some 150 million euros, is that Organon is developing its own antipsychotics, notably asenapine in Phase III, as part of its $370 million alliance with Pfizer [[21/10/03a]], and the drug is expected to be a potential competitor to Risperdal.
Specifically, the new deal, which will have no material impact on Organon’s future royalty income, will see the company get upfront payments of 125 million euros upon signing and 25 million euros in January 2006. The cash is a great boost for Organon, which it said will “mitigate higher R&D and pre-marketing costs for various products in the pipeline.”
“The original collaboration agreement included a provision that any launch by Organon of a directly competing product would result in automatic termination of Risperdal‚s co-promotion activities,” explained Organon’s executive vice president, Emile van Dongen, and “although technically this situation has not yet occurred, both parties agreed to implementing a change now.”
Toon Wilderbeek, Organon’s president, claimed that his firm has “made a solid contribution to the success of Risperdal,” and added that “Organon has steadily improved its own knowledge and position in the CNS field and has built up its own solid, well-filled pipeline.”
Indeed, much excitement surrounds asenapine and its prospects have led analysts at Smith Barney to raise their rating on Akzo stock to ‘buy’from ‘hold’, upping their target price to 40 euros per share from 33 euros. The broker said the drug has the “greatest potential” compared with Solvay’s new antipsychotic bifeprunox, which is also in Phase-III [[04/06/04]].