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Biovail Announces Acquisition of Worldwide Rights to Tetrabenazine
Transaction Directly Aligned with Specialty CNS Strategy; Immediately Accretive To Revenues, Margins & Cash Flows
TORONTO--(BUSINESS WIRE)--May. 18, 2009--
Biovail Corporation (NYSE:BVF) (TSX:BVF) today announced a wholly owned
subsidiary has entered into a definitive agreement to acquire worldwide
development and commercialization rights to the entire portfolio of
tetrabenazine products, including Xenazine®/Nitoman®
(tetrabenazine tablets), and the associated intellectual property rights
held by Cambridge Laboratories (Ireland) Ltd and its affiliates. The
transaction is anticipated to close within 90 days, subject to customary
closing conditions. In November 2008, Xenazine was launched in the
United States, where it has orphan drug status through August 2015 for
the treatment of chorea associated with Huntington’s disease. In Canada,
Nitoman has been available since 1996 and is indicated for a number of
hyperkinetic movement disorders, including Huntington’s chorea, Tourette
Syndrome and tardive dyskinesia. Tetrabenazine is marketed through
distribution agreements in a number of countries, including Australia,
Denmark, France, Germany, Ireland, Israel, Italy, New Zealand, Portugal,
Spain, Switzerland and the United Kingdom, with license applications
pending in several European territories.
“This acquisition will be immediately accretive to revenues, margins and
operating cash flows, and is anticipated to be moderately accretive to
GAAP earnings per share in 2010. The transaction represents another
solid step in our transformation to a leading specialty CNS company,”
said Bill Wells, Chief Executive Officer of Biovail. “Xenazine is
showing strong commercial success in the U.S. in treating chorea
associated with Huntington’s disease. By acquiring these worldwide
rights, we believe we will be able to maximize the value of this asset
in the near term for shareholders. In addition, the acquisition further
expands our specialty CNS pipeline, which bolsters our long-term revenue
growth outlook.”
Under the terms of the agreement, Biovail will make a payment of $200
million upon closing of the transaction and will pay an additional $30
million in two tranches over the subsequent 24 months to acquire these
worldwide development, manufacturing, and commercialization rights to
the tetrabenazine product portfolio. This includes a controlled-release
formulation of tetrabenazine in development for Tourette Syndrome
(BVF-018), as well as a tetrabenazine-derived new chemical entity (NCE),
RUS350 – a next-generation molecule that may enter Phase 2 clinical
development in the next 12 months.
In addition, Biovail will obtain a broad range of intellectual property
for the product portfolio, including issued and pending patents. The
agreement enables Biovail to capture the gross margin earned by
Cambridge on its supply of product for the US and Canadian markets.
Biovail will assume a royalty obligation to a third party.
Tetrabenazine tablets in Canada are marketed under the Nitoman brand
name by the Biovail Pharmaceuticals Canada sales force. In the United
States, Biovail supplies Xenazine tablets to its commercialization
partner for a variable percentage of the product’s annual net sales. For
net sales up to $125 million, Biovail’s supply price is 72% of net
sales. Beyond $125 million, Biovail’s supply price is 65% of net sales.
Upon closing of the transaction, Biovail will earn revenue from the
worldwide sales that have been established through Cambridge’s network
of marketing partners in approved territories. Biovail anticipates
seeking marketing approval in countries where treatment for chorea
associated with Huntington’s disease will be commercially viable.
The transaction is immediately accretive to revenues and margins, and is
expected to provide minimal operating cash flows in 2009 and in the
range of $23 million to $26 million in 2010.
About Xenazine/Nitoman (tetrabenazine)
Tetrabenazine is a highly selective and reversible centrally-acting
dopamine depleting drug that works by inhibiting a molecule known as
vesicular monoamine transporter 2 (VMAT2). Xenazine was approved by the
FDA on August 15, 2008, for the treatment of chorea associated with
Huntington’s disease, based on the results of a double-blind,
placebo-controlled, Phase 3 study that found Xenazine significantly
reduced patients’ chorea burden, improved global outcome scores, and was
generally safe and well tolerated. Additional post-marketing preclinical
studies further elucidating the safety profile of the product are being
conducted. Tetrabenazine has been available in Europe for more than 30
years and in Canada since 1996. Full prescribing information is
available on the Investor Relations page of Biovail’s website at www.biovail.com.
About Huntington’s Disease
Affecting an estimated 25,000 Americans, Huntington’s disease is a
devastating neurodegenerative disease that causes progressive movement
disorders, cognitive dysfunction and behavioral changes and is
ultimately a fatal condition. Chorea is the most common symptom,
affecting approximately 90% of Huntington’s disease patients, and is
characterized by excessive, involuntary and repetitive movements, which
are the most visible and dangerous manifestations of Huntington’s
disease and interfere with patients’ abilities to perform activities of
daily living, including dressing, bathing and caring for themselves. For
more information about Huntington’s disease, please visit http://www.hdfoundation.org
or http://www.hdsa.org.
Important Safety Information
The most frequent adverse events reported with Xenazine include
sedation/somnolence, fatigue, insomnia, depression, akathisia and
nausea. Xenazine can increase the risk of depression and suicidal
thoughts and behavior (suicidality) in patients with Huntington’s
disease and the drug is therefore contraindicated in patients who are
actively suicidal, and in patients with untreated or inadequately
treated depression. Xenazine is also contraindicated in patients with
impaired hepatic function and in patients taking monoamine oxidase
inhibitors or reserpine. Xenazine was approved with a required Risk
Evaluation and Mitigation Strategy (REMS) to ensure that the benefits of
the drug outweigh its risks, particularly the risks of depression and
suicidal thoughts and actions. REMS is a strategy to manage a known or
potential serious risk associated with a drug or biological product.
Caution Regarding Forward-Looking Information and “Safe Harbor”
Statement
To the extent any statements made in this release contain information
that is not historical, these statements are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and may be forward-looking information under applicable
Canadian provincial securities legislation (collectively,
“forward-looking statements”). These forward-looking statements relate
to, among other things, our objectives, goals, targets, strategies,
intentions, plans, beliefs, estimates and outlook, including, without
limitation, statements concerning the terms of the transaction,
including the terms for such supply and promotion, anticipated clinical
development and the anticipated impact of the transaction on our
revenues, margins, earnings per share and cash flows, and can generally
be identified by the use of words such as “believe,” “anticipate,”
“expect,” “intend,” “plan,” “will,” “may” and other similar expressions.
In addition, any statements that refer to expectations, projections or
other characterizations of future events or circumstances are
forward-looking statements.
Although Biovail believes that the expectations reflected in such
forward-looking statements are reasonable, such statements involve risks
and uncertainties, and undue reliance should not be placed on such
statements. Certain material factors or assumptions are applied in
making forward-looking statements, and actual results may differ
materially from those expressed or implied in such statements. Important
factors that could cause actual results to differ materially from these
expectations include, among other things: the satisfaction of certain
closing conditions by the parties to the transaction, acceptance and
demand for pharmaceutical products, the impact of competitive products
and pricing, uncertainties associated with the development, launch and
commercialization of new products, reliance on key strategic alliances,
contractual disagreements with third parties, availability of raw
materials and finished products, the difficulty of predicting the impact
of post-marketing studies on U.S. Food and Drug Administration
approvals, the regulatory environment generally, consolidated tax rate
assumptions, fluctuations in operating results and other risks detailed
from time to time in the Company’s filings with the Securities and
Exchange Commission and the Canadian Securities Administrators, as well
as the Company’s ability to anticipate and manage the risks associated
with the foregoing. Additional information about these factors and about
the material factors or assumptions underlying such forward-looking
statements may be found in the body of this news release, as well as
under the heading “Risk Factors” contained in Item 3(D) of Biovail’s
most recent Annual Report on Form 20-F.
The Company cautions that the foregoing list of important factors that
may affect future results is not exhaustive. When relying on Biovail’s
forward-looking statements to make decisions with respect to the
Company, investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. Biovail undertakes
no obligation to update or revise any forward-looking statement.
About Biovail Corporation
Biovail Corporation is a specialty pharmaceutical company engaged in the
formulation, clinical testing, registration, manufacture, and
commercialization of pharmaceutical products. The Company is focused on
the development and commercialization of medicines that address unmet
medical needs in niche specialty central nervous system (CNS) markets.
For more information about Biovail, visit the Company’s web site at www.biovail.com.
For further information, please contact Nelson F. Isabel at 905-286-3000
or send inquiries to ir@biovail.com.
Source: Biovail Corporation
Biovail Corporation
Nelson F. Isabel, 905-286-3000
Vice-President,
Investor Relations & Corporate Communications
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