Alpharma Inc. has reached agreement with Institut Biochimique SA (IBSA), a privately-owned, global pharmaceutical company headquartered in Lugano, Switzerland, to obtain exclusive license and distribution rights to market the Flector Patch, the first prescription topical NSAID (non-steroidal anti-inflammatory drug) patch approved by the FDA in the United States.
The Flector Patch, which delivers the anti-inflammatory and analgesic effects of patent-protected diclofenac epolamine, is indicated for the topical treatment of acute pain due to minor strains, sprains, and contusions. IBSA currently markets this product in Europe, and Alpharma is targeting a US launch for early 2008.
"This compelling new product opportunity for Alpharma represents significant progress towards our goal of creating a high value specialty pharmaceutical company," commented Dean Mitchell, president and chief executive officer of Alpharma. "The Flector Patch is an excellent strategic fit that will diversify our product portfolio, leverage our current sales force, and is consistent with Alpharma's commitment to bring innovative products to the market to enhance physicians' ability to treat pain. The added infrastructure investments we will make to support this new product will raise our profile in the pain market and are highly synergistic with our current Kadian product line and our plans to bring abuse deterrent opioid products to the market beginning in 2009."
The company expects to double its current pharmaceuticals sales force to support both the launch of this new product, as well as the planned launch of its abuse-deterrent opioid containing pain products currently in development. In the second half of 2007, the company expects to incur approximately $20 million ($0.30 earnings per share) of costs that are incremental to its most recent outlook, principally for sales force expansion, marketing and related activities, to prepare for the U.S. launch of the Flector Patch in early 2008. Following the initial period of sales and marketing ramp-up and related investments in 2007 and 2008, the company expects this product to contribute positively to earnings beginning in the second half of 2009.
In addition, under the terms of its agreements with IBSA, Alpharma will also receive exclusive U.S. license and distribution rights to Tirosint (synthetic levothyroxine sodium) gel capsules for thyroid hormone replacement therapy, recently approved by the FDA. IBSA's proprietary soft gel capsule technology used for Tirosint results in improved capsule-to-capsule uniformity of levothyroxine, resulting in enhanced consistency of dosing. The company is evaluating the optimum means to commercialize this product.
The terms of the agreements include a $100 million payment to be made at closing, warrants for the purchase of up to one million shares of the company's common stock at a price of $35 per share, as well as on-going consideration for supply of products.
The company expects to close this transaction within the next 30 to 60 days, following the completion of reviews under the Hart-Scott Rodino Antitrust Improvements Act of 1976.
The Flector Patch is a 10x14 cm adhesive patch containing 180 mg of diclofenac epolamine applied on a non-woven felt backing and covered with a polypropylene release liner. Flector Patch contains 1.3% epolamine salt of diclofenac, and has been approved by the FDA for the treatment of acute pain due to minor strains, sprains and contusions. Since its initial approval by Swiss regulatory authorities in 1993, Flector Patch has been approved for sale in 39 countries throughout the world. IBSA's patented diclofenac epolamine was specifically developed to achieve a significant release of active from the patch and promote subsequent absorption through the skin. Application to the injured area twice a day results in a local analgesic and anti-inflammatory effect with only minor systemic exposure to diclofenac.
The Flector Patch contains the NSAID, diclofenac epolamine. NSAIDs may cause an increased risk of serious cardiovascular thrombotic events, myocardial infarction, and stroke, which can be fatal. This risk may increase with duration of use. Patients with cardiovascular disease or risk factors for cardiovascular disease may be at greater risk. Flector Patch is contraindicated for the treatment of peri-operative pain in the setting of coronary artery bypass graft surgery. NSAIDs cause an increase risk of serious gastrointestinal adverse events including.