BioMarin Pharmaceutical said today it has acquired near-total global rights to Merck Serono’s phenylketonuria (PKU) franchise, including Kuvan® (sapropterin dihydrochloride) and pegvaliase, in a deal that could generate up to €525 million ($586 million) for Merck Serono.
Until now, BioMarin had exclusive rights to Kuvan in the U.S. and Canada, and to pegvaliase in the U.S. and Japan. BioMarin will now have rights to Kuvan worldwide, except Japan, and all worldwide rights to pegvaliase.
Kuvan is a marketed product approved in the U.S. in 2007, whose net product revenue for the first six months of this year rose 20% from January–June 2014, to $110.3 million. Kuvan is the synthetic form of 6R-BH4, a naturally occurring co-factor that works in conjunction with the enzyme phenylalanine hydroxylase (PAH) to metabolize phenylalanine into tyrosine.
Kuvan is the first oral therapy approved for the treatment of hyperphenylalaninemia (HPA) due to PKU in patients of all ages who have shown to be responsive to Kuvan or due to tetrahydrobiopterin (BH4) deficiency. Kuvan was developed jointly by BioMarin Pharmaceutical and Merck Serono. Kuvan is to be used in conjunction with a phenylalanine-restricted diet.
Pegvaliase—which stands for PEGylated recombinant phenylalanine ammonia lyase—is a Phase III enzyme substitution therapy being developed by BioMarin as a potential therapeutic option for adults with PKU. Pegvaliase, also called PEG-PAL, is currently in pivotal studies with data expected in March/April of 2016.
BioMarin reasons that the two products combined will expand and globalize its leadership position in PKU, hence the company’s interest in expanding its commercial efforts overseas by expanding its rights to the drugs beyond North America.
“This is an excellent transaction for BioMarin as it provides numerous operational and strategic synergies for the company,” BioMarin chairman and CEO Jean-Jacques Bienaimé, said in a statement. “We look forward to expanding our PKU franchise beyond the U.S. and Canadian markets and into our existing commercial footprint of about 60 countries where Kuvan is currently sold.”
Bienaimé added that BioMarin will leverage its established worldwide infrastructure, and its relationships within the PKU community, to ensure that patients globally have access to Kuvan, and potentially pegvaliase upon approval.
BioMarin will provide Merck Serono with an upfront payment of €340 million ($379.6 million)—plus an additional €60 million (about $67 million) if combined sales of Kuvan and pegvaliase reach undisclosed cumulative sales thresholds. In addition, BioMarin agreed to pay Merck Serono €125 million ($139.6 million) tied to regulatory milestones for pegvaliase.
Merck Serono acquired exclusive rights to Kuvan, and the option to develop pegvaliase outside of the U.S. and Japan, from BioMarin in 2005. Kuvan is now sold by Merck Serono in many countries where BioMarin has a commercial presence for both Naglazyme® (galsulfase) and Vimizim® (elosulfase alfa). Kuvan has Orphan Drug exclusivity in Europe until 2020.
Upon closing of the transaction in January 2016, BioMarin said it will record all sales and profits generated by Kuvan. The company said revenue from new territories outside the U.S. is expected to be between $70 million to $80 million next year—resulting in total Kuvan revenue to BioMarin for 2016 projected at between $320 million and $350 million.
BioMarin said it expects to transition commercialization activities from Merck Serono over the next 6 to 12 months, and will evaluate opportunities to drive further growth of Kuvan in the new territories through its global commercial infrastructure.
The deal is expected to be accretive to non-GAAP earnings beginning in 2016, and accretive to GAAP earnings in 2018, BioMarin added.