Barr Laboratories Inc and Wyeth have signed a letter of intent for Barr to acquire the rights to three currently marketed Wyeth products and an option to acquire the rights to a fourth product currently marketed by Wyeth. Also under terms of the letter of intent, Barr will acquire a license from Wyeth for a late stage oral contraceptive product. Barr intends to complete development and market the product in the United States. In consideration of these transactions, Barr will make a payment of approximately $25 million to Wyeth at closing and will make additional future payments as sales milestones are achieved.
The transaction is subject to completion of due diligence and other conditions, including Hart-Scott-Rodino antitrust filings and approval by the Boards of Directors of both Barr and Wyeth, and is expected to close by December 31, 2002.
"This transaction would immediately add three currently marketed products to Barr's growing proprietary product portfolio with the potential of adding a fourth proprietary product. In addition, we are looking forward to beginning Phase III clinical studies in the second half of calendar 2003 for the development of the oral contraceptive product licensed from Wyeth," said Bruce L. Downey, Barr's Chairman and Chief Executive Officer. "Partnering with one of the world's leaders in women's healthcare products will strengthen our ability to develop innovative oral contraceptive products, as well as position our Company for long-term growth."
Under the terms of a purchase agreement, Barr will acquire from Wyeth assets in the United States related to three currently marketed products. The three products are Diamox Sequels (for glaucoma), Zebeta (for hypertension) and Ziac (for hypertension). Annualized brand gross sales for these three products based on IMS sales data for the quarter ended September 2002 were approximately $51 million. Under the terms of the purchase agreement, Wyeth will assign to Barr the NDAs and all other regulatory approvals and licenses related to the products and will supply Barr with finished packaged products until manufacturing is transferred to a Barr facility. Barr will assume responsibility for all regulatory reporting activities for the products.
Under the terms of the option agreement, Barr will obtain an exclusive non-transferable option from Wyeth to purchase all assets in the United States related to Wyeth's Aygestin progestin product. If Barr exercises this option, Wyeth will assign to Barr the NDA and all other regulatory approvals and licenses related to the product and will supply Barr with finished packaged Aygestin product until manufacturing is transferred to a Barr facility. Barr would assume responsibility for all regulatory reporting activities for the product. Annualized gross brand sales for Aygestin based on IMS sales data for the quarter ended September 2002 were approximately $7 million.
Under the terms of the licensing agreement, Wyeth will grant Barr an exclusive sublicense and supply agreement for a late stage oral contraceptive product that Barr plans to complete development on and market in the United States. Barr will assume responsibility for development of the product for oral contraceptive use, including Phase III clinical studies that are expected to begin in the second half of calendar 2003. Under the same agreement, Barr will grant Wyeth an exclusive license, with a right to grant sublicenses, to any oral contraceptive products developed by Barr under the licensing agreement for sale outside of the United States.
Wyeth and Barr Laboratories have agreed that, following the closing, they will terminate the litigation relating to the anti-trust suit filed in September 2000 by Duramed Pharmaceuticals Inc against Wyeth-Ayerst Laboratories Inc. Barr Laboratories Inc and Duramed merged in October 2001.
The Company also noted that exclusive of charges associated with the transaction, including a one-time payment to Barr's legal counsel in the litigation with Wyeth, it expects the transaction to be accretive to the balance of fiscal 2003 earnings and thereafter.