XenoPort has reached an agreement with Glaxo Group (GSK) to terminate their collaboration agreement concerning Horizant® (gabapentin enacarbil) extended-release tablets, for which GSK held commercialization rights and certain development rights in the United States.

GSK is returning Horizant rights to XenoPort and providing certain assistance during a transition period. The termination and transition agreement also provides for a mutual release of claims and resolves all ongoing litigation between the parties. XenoPort acknowledges that GSK fulfilled its contractual obligations on the development, manufacturing, and commercialization of Horizant.

During the transition period that will end on April 30, 2013, GSK will continue to exclusively commercialize, promote, manufacture, and distribute Horizant in the United States. XenoPort will not be responsible for any losses associated with the terminated collaboration agreement, and XenoPort will not receive any revenue or incur any losses from GSK’s sales of Horizant during the transition period. Following the transition period, XenoPort will assume all responsibilities for further development, manufacturing and commercialization of Horizant in the United States.

As part of the termination and transition agreement, GSK is purchasing $20.0 million of common stock of XenoPort. In addition, during the next six months, XenoPort has the option to require GSK to purchase up to an additional $20.0 million of common stock of XenoPort at a 12.5% premium to the average of the closing prices of XenoPort’s common stock for the 10 trading days prior to the day XenoPort notifies GSK of its decision to exercise this option.

FDA approved Horizant extended release tablets for the management of postherpetic neuralgia (PHN) in adults back in June. Horizant was approved in the U.S. for the treatment of moderate-to-severe primary restless legs syndrome (RLS) in adults during April 2011, and is also approved, under the tradename Regnite®, for the treatment of RLS in Japan.

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