PDL BioPharma has acquired exclusive worldwide rights to two antihypertension drugs from Novartis through an investment in a new majority-owned subsidiary.
PDL said yesterday it will invest up to $294 million in the subsidiary, Noden Pharma DAC, and hold three of the Noden board’s five seats.
More importantly, PDL will also hold an 88% equity interest in Noden, which will acquire from Novartis the drugs sold in the U.S. as Tekturna® (aliskiren) and Tekturna HCT® (aliskiren and hydrochlorothiazide).
Aliskiren is the only approved direct renin inhibitor indicated for hypertension, while hydrochlorothiazide is a diuretic. The drugs are sold outside the U.S. as Rasilez® and Rasilez HCT®, respectively.
Novartis generated global sales of $154 million last year from the drugs.
“We believe that, with additional, targeted promotion efforts, especially in the U.S., revenues of Tekturna could increase,” PDL President and CEO John P. McLaughlin said in a statement.
PDL said its investment in Noden could be as low as $145 million if it can obtain debt financing. Under that scenario, PDL said, it would pay Noden at least $75 million upon closing, another $32 million on the first anniversary of the closing of the deal, and at least $38 million in milestone payments.
If it cannot secure debt financing, PDL said, it would pay Noden up to approximately $110 million upfront, up to $89 million on the 1-year anniversary, and up to $95 million in milestones.
The deal is subject to customary closing conditions that include expiration or termination of the applicable waiting period under the Hart–Scott–Rodino Antitrust Improvements Act of 1976, as amended, delivery by PDL to Novartis of a bank guarantee for $75 million toward the $89 million first-anniversary payment, and a company guarantee that it will pay the $14 million difference to Novartis.
“PDL has completed many diverse deal structures for biotech/pharma companies looking to secure funding, and today's announcement commits PDL to its first significant equity investment as part of an acquisition of a specialty pharmaceutical product,” McLaughlin added. “We believe that the acquisition market for specialty pharmaceutical products is currently favorable and presents a meaningful growth opportunity for us.”