Watson Pharmaceuticals is paying Columbia Laboratories $47 million up front for all the latter’s progesterone product-related assets plus 11.2 million shares of Columbia’s common stock. Watson will also pay Columbia double-digit royalties on specific sale. The agreement relates primarily to the sustained-release bioadhesive progesterone gel Crinone 8%/Procheive, which is indicated for progesterone supplementation or replacement as part of assisted reproduction in infertile women with progesterone deficiency.
The deal could include another $45.5 million in milestone payments relating to successful completion of an ongoing Phase III trial with Procheive, regulatory filings, approvals, and product launches.
Columbia currently promotes Crinone 8% in the U.S., while Merck Serono holds ex-U.S. rights and markets the drug in 56 countries. Columbia will retain certain assets and rights to its progesterone business, including those required for it to perform obligations relating to its agreement with Merck Serono.
The firm is also collaborating with the NIH on the Phase III program called Pregnant (Prochieve extending gestation a new therapy), evaluating the use of Procheive 8% to reduce the risk of preterm birth in women with a short cervix.
Columbia says that sale of its progesterone franchise means its business will now comprise domestic and international royalties and milestone payments, manufacturing revenues from Crinone/Prochieve, along with sales of its Striant® testosterone buccal system for the treatment of male hypogonadism and its drug delivery technologies. In December 2009, the company’s shares dipped enough to fall below the minimum bid price requirement for continued listing on the NASDAQ Global Market. The company was informed in mid-January that it had regained compliance.
“Watson is a great strategic fit for our progesterone business,” comments Frank C. Condella Jr., Columbia’s interim CEO. “Watson has a field force of 350 representatives calling on Ob/Gyns and urologists plus specialists to focus on fertility clinics. Because of the structure of its sales force, Watson has the capability to expand sales resources for Crinone as required, and we are confident in their ability to execute a strong launch in the new short cervix preterm birth indication, assuming data from the Pregnant study are positive and the product is approved for this new indication by the FDA.”