Switzerland-headquartered Nycomed has signed a deal worth potentially over $400 million with Sepracor which will see the latter firm gain the US rights to the corticosteroid ciclesonide.
Ciclesonide is the active ingredient in both Nycomed’s asthma treatment Alvesco, which less than a fortnight ago was given the green light by the US Food and Drug Administration, and the also FDA-approved Omnaris AQ nasal spray for allergic rhinitis. Under the terms of the deal, Sepracor will pay Nycomed $150 million upfront and up to $280 million in additional payments, plus royalties and compensation for providing finished product.
The Zurich-based privately-held firm’s chief executive Hakan Bjorklund, said that his firm had been “looking for a strategic partner both able to commercialise the products and further develop them. With Sepracor we have found that ideal partner”. He added that the agreement “clearly leverages the potential of ciclesonide that we believe to be one of the most innovative corticosteroids available”.
His counterpart at Sepracor, Adrian Adams, said that the company’s 1,600-strong sales force will promote the two new products. He went on to say that ciclesonide fits nicely with its inhalable asthma medicine Xopenex (levalbuterol) and Brovana (arformoterol) for chronic obstructive pulmonary disease. The US combined market for inhaled and nasal corticosteroids is estimated at approximately $3.6 billion.
Medicaid pricing errors at Sepracor
Good news then for Nycomed but the day took a turn for the worse at Sepracor after the firm said that a Medicaid pricing error means that it will have to restate its financial results going back to 2002.
Sepracor noted that a review has ”identified potential errors in its Medicaid Best Price” reporting, an announcement which sent its stock down by over 13% in after-hours trading. This means that rebates of $80-$100 million may have to be made to Medicaid and the firm will have to restate financial statements for the quarters ended March 31, June 30 and September 30, 2007 and 2006, as well as for the entire fiscal years of 2002 to 2006.
The company has postponed its conference call for the fourth quarter and full-year 2007 until February 29 or thereabouts, instead of February 5.
