Neurocrine Biosciences, Inc. announced it has purchased from Wyeth all of Wyeth's financial interest in indiplon, Neurocrine's late stage clinical development compound for the treatment of insomnia. Neurocrine will now retain all milestone, royalty and other payments on indiplon commercialization that would have otherwise been payable to Wyeth. The transaction also provides Neurocrine ownership and control over the indiplon composition of matter patent, which expires in 2020.
The transaction is valued at approximately $95 million, with $50 million payable in cash and $45 million payable in Neurocrine common stock at a 15-day average price preceding the signing of the agreement. The stock will have certain registration rights and otherwise be salable under Rule 144 upon the termination of applicable holding periods.
"The acquisition of the indiplon royalty stream from Wyeth has important strategic value for Neurocrine and its shareholders. This transaction leverages our strong cash and equity currency to bolster future earnings. Our indiplon royalty obligations of six per cent are now reduced to three and one-half per cent and will be accretive to earnings in our first year of commercialization," said Gary Lyons, CEO of Neurocrine Biosciences.
Upon approval of the transaction Wyeth will assign to Neurocrine its license agreement with DOV and all of Wyeth's right, title and interest in and to the indiplon composition patent filed by Neurocrine in Wyeth's name. Wyeth's financial interest in indiplon arises out of a 1998 license agreement between Wyeth and DOV Pharmaceutical, Inc. in which Wyeth licensed the indiplon technology to DOV Pharmaceutical in exchange for milestone payments and royalties on future sales of indiplon.
Neurocrine signed an exclusive license and development agreement with DOV in 1998 for indiplon and all therapeutic indications of this compound. In 2002, Neurocrine entered a worldwide agreement with Pfizer for the development and commercialization of indiplon for the treatment of insomnia.
Indiplon is a unique non-benzodiazapine agent that acts on a specific site of the GABA-A receptor. Indiplon has been shown to bind selectively to the specific subtype of GABA-A receptors within the brain believed to be responsible for promoting sleep. There are two formulations of indiplon, immediate release and modified release. Both formulations are being studied in clinical trials to address different types of sleep problems.
Neurocrine is conducting one of the most comprehensive clinical programs in insomnia to address the multiple needs of younger and older adult patients with insomnia such as sleep initiation, sleep maintenance, and the need for chronic usage. Neurocrine has initiated and is completing all of its Phase III safety and efficacy trials to support a New Drug Application (NDA) for the two formulations, expected in the first half of 2004 for indiplon for multiple insomnia indications. The Phase III program alone will have data from approximately 5,000 patients with different types of insomnia. Indiplon was licensed from DOV Pharmaceutical in 1998.
Insomnia is a prevalent condition in the United States, with nearly one-half of the adult population reporting trouble sleeping a few nights per week or more, according to the National Sleep Foundation's (NSF) Sleep in America Poll 2002. Approximately 35 per cent of the adult population reports that they have experienced insomnia every night or almost every night within the past year. Insomnia remains a disorder with high unmet medical needs, including prolonged awakenings during the night with difficulty falling back to sleep.
This transaction is contingent upon the approval of Wyeth's Board of Directors and the requirements of the Hart-Scott-Rodino Antitrust Improvements Act.