As 2012 draws to a close, a pair of drug developers today said they wrapped up deals announced earlier in the year, with varying outcomes.
Acorda Therapeutics completed its acquisition of Neuronex, the developer of a nasal spray formulation of diazepam for which Acorda plans to pursue approvals starting in the new year. Acorda said it made a closing payment of $6.8 million to seal a deal that could be worth as much as $140.8 million.
Acorda is developing the formulation as a treatment for managing selected, refractory patients with epilepsy, on stable regimens of antiepileptic drugs, who require intermittent use of diazepam to control bouts of acute repetitive seizures (ARS).
According to Acorda, up to 175,000 people in the U.S. suffer from ARS despite being on stable regimens of antiepileptic medications. At present, the only approved outpatient treatment option for people who experience such seizures is DIASTAT® AcuDialTM (diazepam rectal gel), a rectally administered gel formulation of diazepam.
“Diazepam Nasal Spray is an important addition to our pipeline and aligns with our core strategy to develop and commercialize products that offer unique benefits to people with neurological diseases,” Ron Cohen, M.D., Acorda’s president and CEO, said in a statement. “This product leverages our existing sales, marketing and medical organizations, which have proved highly successful in bringing novel neurological therapies to market.”
In addition to the $6.8 million closing payment, Acorda will pay Neuronex up to $18 million based on undisclosed regulatory and manufacturing-related milestones, and up to $105 million based on undisclosed specified sales milestones. Tiered upper single-digit to lower double-digit royalty-like “earnout” payments on sales will be paid if the product is approved. In addition, Acorda said, it will assume responsibility for regulatory and sales milestone payments of up to $11 million and single-digit royalties to third parties, based on existing Neuronex licensing agreements.
In a separate deal, Elan announced completion of a spin-out of what it termed a substantial portion of its Prothena (formerly Neotope) drug discovery business into a new, publicly traded independent company. The new Prothena, which is incorporated in Ireland, began trading shares today on NASDAQ.
Prothena rises out of the ashes of Elan, which shut down its South San Francisco drug discovery operations as part of a restructuring to end drug discovery and preclinical drug development programs by year’s end. In a U.S. Securities and Exchange Commission filing, Elan said the shutdown would cost it between $160 million and $180 million as it laid off most of the company’s 400 employees in the region, shuttered the facility, and took charges against earnings.
Elan’s restructuring was touched off over the summer, when an Alzheimer’s disease drug candidate in which it had a financial stake failed two of its four Phase III clinical trials. The drug candidate, bapineuzumab, was co-developed by Pfizer and Johnson & Johnson entity Janssen Alzheimer Immunotherapy R&D. Bapineuzumab was designed to remove plaque-like deposits of beta-amyloid protein in the brain, which interfere with the work of neurons.
Elan shareholders received one Prothena ordinary share for every 41 ordinary shares or ADSs they held in Elan at the demerger date of December 14. As of that date, Elan shareholders effectively owned all of Prothena, as they directly own 82% of Prothena’s outstanding ordinary shares, with the other 18% owned indirectly by the company, through a wholly owned subsidiary of Elan that subscribed $26 million.