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May 1, 2008

Sepracor Inks Deals Worth $188.5M with Arrow

  • Sepracor reports multiple deals with the Arrow Group, including the acquisition of one of Arrow’s affiliates as well as two deals that expand its respiratory disease therapeutic pipeline. The transactions call for $188.5 million in total payments from Sepracor, with $51 million to be paid in the near term.

    Sepracor plans to take over Oryx Pharmaceuticals for $50 million upfront, and shareholders may be entitled to up to $20 million upon achievement of regulatory milestones.

    Under the technology license and development agreement that will help in development of its corticosteroid, ciclesonide. Sepracor will pay Arrow $500,000 upon execution and $47.5 million in future fees.

    According to the global license and development deal covering a combination therapy for chronic obstructive pulmonary disease (COPD), Arrow will receive $500,000 once the transaction goes through. The firm may also get long term payments of up to $70 million.

    The Oryx takeover is expected to close on June 1. Sepracor will gain a portfolio of 14 marketed drugs. Projected 2008 revenues are approximately C$20 million, or $19.6 million, according to Sepracor. Oryx in-licenses and markets branded prescription pharmaceutical products within Canada. The company has focused on cardiovascular and CNS disorders as well as pain and infectious disease therapeutics.

    The technology license and development partnership gives Sepracor know-how and intellectual property rights related to stable sterile steroid suspension formulations and other nebule technology for use in developing ciclesonide in an inhalation solution for asthma. It also covers the planned ciclesonide/Brovana® brand arformoterol tartrate inhalation solution combination for COPD. Sepracor markets Brovana as a maintenance treatment of bronchoconstriction in patients with COPD.

    Arrow will initially get $250,000 related to the stand-alone product and another $250,000 for the combination therapy. Sepracor will also make future payments of up to $22.5 million in support of ciclesonide and $25.0 million linked to ciclesonide/BROVANA. Additionally, Arrow will receive low, single-digit royalties. Sepracor will fully fund and manage development activities.

    Finally, Sepracor also gains global  rights for a Xopenex brand levalbuterol/ipratropium inhalation product. This formulation is reportedly currently ready to enter Phase III development. Separacor’s Xopenex is already approved to treat bronchospasm caused by asthma and COPD.

    Under the terms of the agreement, Arrow will receive single-digit royalties that escalate based on product sales. Sepracor will take over product development commercialization activities. Arrow will be responsible for the formulation development as well as the manufacture and supply of finished-dosage forms.



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