The USA’s Allergan has announced plans to acquire privately-held Esprit Pharma in a $370 million all-cash deal that gives the former access to
the overactive bladder therapy Sanctura.
In addition to Sanctura (trospium), a twice-a-day anticholinergic which Esprit licenses from Indevus Pharmaceuticals, Allergan is also getting hold of the extended-release, once-daily version of the drug. The US Food and Drug Administration recently granted approval for Sanctura XR and it is this version of the drug that could be a big earner for Allergan.
Sanctura XR has demonstrated significant improvements in OAB symptoms. For example, dry mouth, a common side effect in this drug class, was reported in 10.7% of patients treated with the new version, approximately half that reported with Sanctura and this is significant because as many as 70% of idiopathic OAB patients, discontinue medication due to insufficient relief of symptoms or intolerable side effects.
Allergan says that it will launch Sanctura XR in the first quarter of 2008 and it plans to “retain and increase” Esprit's sales force, which currently consists of 160 representatives, and create a dedicated genitourinary division. This all fits nicely with the company’s plans for Botox (botulinum toxin type A), best-known for treating facial wrinkles, but also in Phase II and III trials for the treatment of idiopathic and neurogenic OAB. In addition, Allergan is studying the use of Botox in a Phase II study for the treatment of benign prostatic hyperplasia.
Back to the financials and Esprit expects 2007 revenues for Sanctura, as well as Estrasorb (estradiol topical emulsion) to treat menopause-related symptoms, is approximately $40-$48 million, of which the vast majority will be sales of the former. However Allergan believes that Sanctura XR can have peak sales of $300-$400 million sales and the firm noted that the transaction will be dilutive in 2007 in a range of $0.04-$0.06 per share.
After 2008, the deal should be significantly accretive to both earnings and revenue.