Lundbeck says it is acquiring USA-based Ovation Pharmaceuticals in a deal which is worth up to $900 million and will help the Danish drugmaker achieve its goal of building a North American commercial platform.
Under the terms of the agreement, Lundbeck will pay $600 million upfront upon the closing of the transaction, expected next month, and will make additional payments of up to $300 million within a year of the deal being sealed “upon the achievement of certain product regulatory milestones”.
Principal among those milestones will be approval in the USA of Ovation’s Sabril (vigabatrin). Last month the Food and Drug Administration’s Peripheral and Central Nervous System Drugs Advisory Committee voted unanimously to recommend Sabril as a monotherapy for infantile spasms and an adjunctive treatment for adults with refractory complex partial seizures who have inadequately responded to anticonvulsants.
Ovation is a private, Illinois-based, “profitable and fast growing company”, Lundbeck notes, “with a broad portfolio of marketed products and an attractive pipeline of new, innovative products” primarily focused on the central nervous system. It currently markets Xenazine (tetrabenazine) for chorea associated with Huntington's disease, Tranxene (clorazepate dipotassium) for anxiety disorders, Nembutal (pentobarbital) for acute convulsive disorders, Cogentin (benzatropine) for Parkinson's disease and Desoxyn (desoxyephedrine) for attention-deficit hyperactivity disorder.
Ovation also sells ATryn, a recombinant form of human antithrombin which has just approved by the FDA for the prevention of thromboembolic events in hereditary antithrombin deficient (HAD) patients and a portfolio of hospital-based products, and haematology/oncology therapies. The company’s revenues for 2008 are expected to be in the region of about $204 million with an operating profit of some $32 million.
Ulf Wiinberg, Lundbeck chief executive, said Ovation is “an excellent match” and will provide “a commercial platform in the USA with a highly experienced management team and specialty sales force”. Ovation, which was founded in 2000, has 283 employees, which includes a 68-strong field force.
Mr Wiinberg added that he was impressed by his new partner’s late-stage pipeline and “a proven scientific and regulatory expertise in areas of high unmet medical needs". Apart from Sabril, Ovation has clobazam in Phase III for Lennox-Gastaut Syndrome and an intravenous formulation of carbamazepine for epilepsy, also in late-stage trials.
The move has gone down well with analysts and investors in Lundbeck which saw its shares rise sharply on the announcement. The company has being saying for some time that it would acquire a drug or a company to help replace the loss of revenues it will suffer when the antidepressant blockbuster Cipralex/Lexapro (escitalopram) goes off-patent in 2012.
