Forest Laboratories will buy Furiex Pharmaceuticals for as much as $1.46 billion, the companies said today, marking the second time this year that the buyer is using acquisition to grow its portfolio of gastrointestinal drugs, and the first such deal since Forest Labs agreed to be purchased by Actavis for $25 billion.
Actavis has approved Forest Labs’ deal for Furiex, a transaction that Forest Labs said would not be affected by its plans to pay Furiex $1.1 billion cash, plus up to $360 million in a contingent value right (CVR). The CVR would be payable should Furiex win approval for its lead drug eluxadoline when the company files an NDA for the GI drug later this year.
Eluxadoline (MuDelta) is a first-in-class, locally acting mu opioid receptor agonist and a delta opioid receptor antagonist designed to treat both diarrhea and abdominal pain without severe constipating effects.
On February 4, Furiex released promising topline results from two Phase III trials assessing eluxadoline’s efficacy and safety in treating diarrhea-predominant irritable bowel syndrome (IBS-d). The trials, known as 3001 and 3002, showed that eluxadoline met primary endpoints of composite response based on simultaneous improvements in stool consistency and abdominal pain agreed upon with both the FDA and the European Medicines Agency.
At the time, Furiex’s Founding Chairman Fred Eshelman said in a statement that his company would file an NDA for eluxadoline by the end of the second quarter.
Once the acquisition is completed, Forest plans to sell Furiex’s royalties on two drugs to Royalty Pharma for approximately $415 million. One is Priligy®, a selective serotonin reuptake inhibitor developed treat premature ejaculation “on-demand.” Furiex holds full development and commercialization rights to the drug in US, Japan, and Canada—but has licensed rights to the Menarini Group for commercializing Priligy in Europe, most of Asia, Latin America, Africa, and the Middle East.
The other drug is alogliptin, which is sold under the names Nesina in the U.S., Japan, China, Korea, but marketed in Europe as Vipidia. The once-daily type 2 diabetes drug was developed and marketed by Takeda Pharmaceuticals. Furiex has rights to royalties and sales-based milestones from Takeda for the sale of alogliptin and its combination products in all marketed territories.
Forest added that its acquisition of Furiex is not contingent on the Royalty Pharma agreement.
The deal for Furiex comes more than three months after Forest Labs said on January 8 that it would acquire Aptalis from its private-equity owner TPG Capital for $2.9 billion cash. That deal added three GI treatments to Forest Labs’ portfolio of marketed drugs—the active ulcerative proctitis drug Canasa (mesalamine), the anti-ulcer medication Carafate (sucralfate), and Zenpep (pancrelipase), indicated for exocrine pancreatic insufficiency due to cystic fibrosis or other conditions.
The three accounted for more than 60% of Aptalis’ $688 million in sales in the fiscal year that ended September 30, 2013.
“It is a natural extension of our GI business following our $2.9 billion acquisition of Aptalis earlier this year,” Brent Saunders, Forest Labs’ CEO and president, said in a statement. “We believe eluxadoline will be very complementary to our anchor GI product Linzess and additive to our broader GI portfolio, making us more relevant to gastroenterologists and primary care physicians. With eluxadoline, we expect to have one of the broadest product offerings for the $38 billion GI disease market.”
Forest said it expects to use cash on hand to fund its acquisition of Furiex, which is expected to close in the second or third quarter of this year. The deal is subject to customary regulatory approvals as well as approval by Furiex shareholders.