Questcor's stock leapt nearly 40% during trading yesterday as investors welcomed its $135m-plus purchase of Novartis' rival immune drug Synacthen.
The US speciality pharma said it has bought rights to develop Synacthen (tetracosactide) and Synacthen Depot in its domestic market, and potentially some other regions (subject to closing conditions).
While being approved in multiple indications in the autoimmune/inflammatory field in more than 40 countries worldwide, the products have never been developed or approved for patients in the US market.
According to Don Bailey, President and Chief Executive of Questcor, the acquisition "provides an opportunity to initiate our presence in more than three dozen international markets, giving us an opportunity to reinvigorate Synacthen in these markets and providing us a platform for potential international growth".
But investor enthusiasm for the deal also stems from the fact that Synacthen is actually a synthetic version of adrenocorticotropic hormone (ACTH), the active ingredient in Questcor's own flagship drug Acthar, which is already on the market for a variety of conditions.
David Young, Questcor's Chief Scientific Officer, said the firm "intends to develop and seek FDA approval for Synacthen" and is "committed to developing this product not only in conditions different than Acthar but also in conditions where Synacthen would potentially provide a clinical benefit over Acthar".
Under the terms of deal, Questcor has paid Novartis an upfront fee of $60 million and has agreed extra payments of at least $75.0 million plus milestones prior to FDA approval. If a US regulatory nod is obtained then the firm will pay the Swiss drug giant another milestone and sales-based royalties, it said.
Questcor's stock eventually closed up 15% on the NASDAQ following the news.