Horizon Obtains US Rights to Arthritis Drug Vimovo
Horizon Pharma will spend $35 million to acquire U.S. rights to the arthritis treatment Vimovo from AstraZeneca in a deal that the drug developer says will speed its push to profitability.
The Deerfield, Ill., company said Tuesday that it expects the acquisition to significantly increase its revenue. Aside from the upfront payment, Horizon also will pay at least $5 million in royalties next year and $7.5 million each year after that to Pozen Inc., as long as Pozen's patents covering Vimovo remain in effect.
Pozen developed Vimovo with AstraZeneca.
Horizon said it expects to start sales of Vimovo early next year and will expand its primary care sales force. It expects to be profitable in 2014 on an adjusted basis, or excluding one-time items.
Vimovo is approved as a treatment for symptoms of osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis, an inflammatory disease of the spinal bones. It is intended for use by patients who are at high risk of gastric ulcers, a common side effect of other drugs that treat those conditions.
Vimovo combines the active ingredients in the pain reliever naproxen with the stomach-acid blocker used in Nexium.
Horizon also said Tuesday it will issue $150 million in convertible senior notes in part to fund the Vimovo deal.
Shares of Horizon closed at $4.47 on Monday and have traded between $1.97 and $5.19 over the past year.