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Feb 5, 2008

PDL Divests Cardiovascular Franchise to EKR for $85M

  • EKR Therapeutics has agreed to buy PDL BioPharma’s cardiovascular assets and will pay $85 million at closing. The firm could pay up to $85 million more in development and sales milestones plus royalties on certain acquired clinical candidates.

    In October 2007, PDL BioPharma decided to sell the company as a whole or its key assets. “Today’s announced transaction represents another important achievement toward our goal to maximize the value of PDL’s assets for our stockholders,” according to L. Patrick Gage, Ph.D., interim CEO for PDL. “In connection with our strategic process, we continue to explore our alternatives for our remaining assets including our royalty stream and our biotech R&D and manufacturing assets and potential mechanisms to distribute proceeds from our completed transactions.”

    Under the terms of the agreement with PDL, EKR thus gains three marketed products: Cardene® I.V., Cardene SR®, and Retavase®. The company will also add new formulations of Cardene and ularitide to its pipeline. EKR expects to hire a number of PDL’s commercial employees in support of the expanded product portfolio associated with this acquisition.

    PDL will receive $25 million upon the approval of a new formulation of Cardene. PDL anticipates that this will occur before the November 2009 Cardene I.V. patent expiry. Two additional milestones of $30 million each will be payable upon achievement of $80 million and $150 million in annual net product sales of the new Cardene formulations. EKR will also pay 10% and 5% royalties on net sales of the new Cardene formulations and ularitide, respectively.

    “In addition to our core competency in the acute-care setting,” points out Howard Weisman, EKR’s chairman and CEO, “EKR is uniquely well positioned to maximize the market potential of the PDL products, and we expect our revenues to increase at least 10-fold as a result of this transaction.”

    EKR states that it will focus all development efforts on the Cardene portfolio and will not pursue additional development for the product in pediatric patients. The companies believe that the long-term value of this franchise will be better protected and enhanced by concentrating on lifecycle-management programs.

    Cardene I.V. is approved for the short-term treatment of hypertension when oral therapy is not feasible or desirable. Cardene I.V. plus Cardene SR net product sales for the 12 months ended September 30, 2007, was reportedly $143.9 million.

    Retavase is a fibrinolytic agent marketed for the management of acute myocardial infarction in adults for the improvement of ventricular function following AMI, the reduction of the incidence of congestive heart failure, and the reduction of mortality associated with AMI. Retavase net product sales for the 12 months ended September 30, 2007, were $21.6 million, according to the companies.

    Ularitide is currently in Phase II development as a potential treatment for patients with acute decompensated heart failure.



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