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Dec 12, 2012

$185M+ Deal Ends Incline's IONSYS Saga

  • The Medicines Company will acquire Incline Therapeutics for $185 million upfront and undisclosed additional payments tied to regulatory and commercial milestones, ending a more-than-two-year saga over Incline’s ownership—and, the buyer hopes, an even longer struggle to finally get Incline’s lead product marketed and commercialized.

    Incline is focused on developing IONSYS® (fentanyl iontophoretic transdermal system), a compact, disposable, needleless patient-controlled analgesia system for short-term management of acute postoperative pain in hospital settings. While IONSYS won marketing approvals from FDA and the European Medicines Agency in 2006, the system never launched in the U.S., and was voluntarily recalled in Europe by then-owner Alza in 2008 after issues of device stability arose.

    Incline acquired IONSYS from Alza in 2010 and has spent the past two years trying to win back support from regulators on both sides of the Atlantic.

    "We have been very impressed with the work that the Incline team has done to address prior challenges and to prepare the product for near-term resubmission for marketing in the U.S. and Europe,” Glenn Sblendorio, The Medicines Company’s president and CFO, said in a statement. “We expect that if we obtain IONSYS approval, we could launch IONSYS in early 2014 in the U.S. and soon thereafter in Europe."

    The deal will also bring cash into the coffers of the suitor Incline spurned when it agreed instead to be acquired by The Medicines Company. Cadence Pharmaceuticals will receive $13 million to buy out its interest in its exclusive option agreement to buy Incline—a deal announced in June 2010—plus about $1.5 million from the purchase of Cadence’s Incline stock by The Medicines Company, subject to adjustment and potentially a pro-rata share of future milestone payments.

    Cadence paid Incline a $3.5 million “option fee” upfront as part of their deal, under which Cadence agreed to buy Incline for up to $135 million during the first of two option periods, and up to $228 million during the second, plus payment of up to $57 million if FDA re-approved IONSYS.

    While the boards of Incline and The Medicines Company have already signed off on their deal, it is still subject to approval by Incline shareholders and other conditions. The deal is expected to close in the first quarter of 2013.

    The Medicines Company said the deal was one of two moves through which it hopes to improve its competitive position in perioperative hospital care. The company is also acquiring rights to Recothrom®, an FDA-approved recombinant thrombin for controlling nonarterial bleeding during surgery, from Bristol-Myers Squibb (BMS) under a two-year IP license agreement.

    The Medicine Company will pay BMS upfront payments of $105 million and a $10 million option fee, plus tiered royalties on annual net revenues of Recothrom during the collaboration term. BMS will manufacture Recothrom and serve as The Medicine Company's exclusive supplier of the drug. 

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