PERNIX to Acquire TREXIMET® Tablets for Migraine From GSK
Pernix Therapeutics Holdings has signed an agreement with GlaxoSmithKline to acquire the U.S rights to Treximet® (sumatriptan/naproxen sodium) for the acute treatment of migraine attacks with or without aura in adults. Pernix’s team of approximately 90 specialty sales professionals will support the sales and marketing of Treximet®.
Doug Drysdale, Chairman, President and CEO of Pernix noted, “The acquisition of Treximet® further accelerates the transformation of Pernix into a specialty pharmaceutical company and expands our portfolio of CNS brands, Silenor® and KhedezlaTM. With the strong presence Pernix is establishing in the adjacent psychiatric market, this acquisition provides Pernix an opportunity to expand the company’s reach and penetration into the very important neurology space.”
•Adds immediate revenues and earnings, FY2013 Treximet® net sales $78.7 million
•Leverages Pernix’s existing sales presence and experience across psychiatry and neurology customers
•Expected to nearly double Pernix revenues and provide EBITDA margins in excess of 30% on a FY2014 pro forma basis
•Pernix estimates pro forma FY2015 total company revenues will exceed $230 million with an EBITDA margin of over 40%
•Pernix will make an upfront payment to GSK of $250 million for the U.S rights to Treximet®
•GSK will assign to Pernix the Product Development and Commercialization Agreement (“PDC Agreement”) between GSK and POZEN, Inc. (NASDAQ: POZN)
•POZEN and Pernix will amend the PDC Agreement to facilitate further development of Treximet®
•The Company will purchase existing inventory from GSK and GSK will continue to manufacture Treximet® in the near future under a long-term Supply Agreement with Pernix
•The Company expects the transaction to close and to transfer Treximet® no later than August 1, 2014 following Hart Scott Rodino approval and closing of financing by Pernix
•The Company will continue to make royalty payments on net sales of the product
•The transaction will be financed through a combination of cash, debt and equity-linked or other securities
•Pernix expects to begin sales of Treximet® immediately following the closing of the transaction with its approximately 90 sales professionals to specific targets in the Neurology, Psychiatry and the Primary Care audiences.
•Pernix is ready to take advantage of minimal branded competition in a promotionally sensitive market with a staged re-launch of Treximet® with increased promotion, including a revised campaign for Healthcare professionals and consumers, as well as specific tactics addressing managed care and pharmacy programs.
•Treximet® is currently the lowest priced branded migraine treatment available, yet provides superior pain relief compared to placebo and to both of the single mechanism of action components.
•Pernix also plans to seek an extension of the exclusivity of Treximet® with the first ever pediatric indication (age 12 to 17) for any sumatriptan treatment, expected to file by the end of 2014, as well as additional life-cycle opportunities that are currently being explored. Pernix will pay GSK additional consideration of $17 million upon receipt of updated FDA Written Request for pediatric exclusivity.
Under the amended PDC Agreement, Pernix will complete the filing for a pediatric indication for Treximet® and undertake certain new activities to extend the product’s life. In addition, Pernix will release restrictions on POZEN’s right to develop and commercialize additional dosage forms of sumatriptan/naproxen combinations outside of the United States.
In connection with the assignment of the PDC Agreement, Pernix shall make a payment of $3 million to CPPIB Credit Investments Inc. and has also granted POZEN a warrant to purchase 500,000 shares of Pernix common stock at an exercise price equal to the closing market price on May 13, 2014. The warrants will be exercisable from the closing date of the transaction until February 2018.
The amended PDC Agreement provides for royalties of 18% of net sales with quarterly minimum royalty amounts of $4 million for the calendar quarters commencing on January 1, 2015 and ending on March 31, 2018.
Treximet® was first approved by the U.S. Food and Drug Administration (FDA) in April 2008 for the acute treatment of migraine attacks, with or without aura, in adults. The product is formulated with POZEN’s patented technology of combining a triptan with a non-steroidal anti-inflammatory drug (NSAID) and GlaxoSmithKline’s (GSK) RT Technology™. Treximet® has been shown to provide superior sustained pain relief compared to placebo and to both of the single mechanism of action components.
In clinical trials, Treximet® provided a significantly greater percentage of patients migraine pain relief at two hours compared to sumatriptan 85mg or naproxen sodium 500 mg alone. In addition, Treximet® provided more patients sustained migraine pain relief from two to 24 hours compared to the individual components.