AMAG Pharmaceuticals, Inc.,a specialty pharmaceutical company, has licensed the US commercial rights to MuGard, a marketed product for the management of oral mucositis, from Access Pharmaceuticals, Inc.
MuGard is an oral mucoadhesive that is designed to manage oral mucositis by forming a protective hydrogel coating over the oral mucosa to shield the membranes of the mouth and tongue. Oral mucositis is a common side effect of cancer treatments, with approximately 400,000 patients developing the condition each year.
"Oral mucositis can be a frequent and problematic side effect of both chemotherapy and radiation therapy for cancer patients," said Greg Madison, chief commercial officer of AMAG. "We believe that MuGard could become a category leader in the hands of our skilled sales force and that our experienced commercial team, our relationships with haematology/oncology practices and our partnerships with key group purchasing organizations can help drive significant growth of this brand."
"I am pleased to announce this license agreement with AMAG Pharmaceuticals, as we believe that expansion of reach is critical to the commercial success of MuGard," said Jeffrey B. Davis, president and chief executive officer of Access Pharmaceuticals, Inc. "AMAG's domestic presence, resources and strategic emphasis on expansion of product offerings in complementary therapeutic areas makes them ideally suited to enhance commercialization of MuGard here in the US."
Under the terms of the license agreement, AMAG will pay Access an upfront license fee of $3.3 million in exchange for exclusive commercial rights to MuGard in the US. AMAG will also purchase existing MuGard inventory from Access and will pay a tiered, double-digit royalty on net sales of MuGard to Access.
"We are pleased to announce the addition of MuGard to the AMAG portfolio, a product that can truly help the many patients who might suffer from oral mucositis," commented William Heiden, AMAG's president and chief executive officer. "MuGard will provide immediate incremental top-line growth and it meets all of our previously defined deal criteria, as a nice tuck-in product with good upside potential and intellectual property runway. Our business development team continues to diligently work on numerous additional product opportunities, and this license represents a solid first step on the path of building a multi-product specialty pharmaceutical company."
AMAG expects that MuGard will provide attractive gross margins to the company with minimal additions to its operating costs. AMAG will provide a complete update to its financial guidance in connection with reporting its second quarter financial results. The company expects MuGard to be accretive to earnings in 2014.
Leerink Swann LLC served as financial advisor to AMAG.
MuGard Mucoadhesive Oral Wound Rinse is indicated for the management of oral mucositis/stomatitis (that may be caused by radiotherapy and/or chemotherapy) and all types of oral wounds (mouth sores and injuries), including aphthous ulcers/canker sores and traumatic ulcers, such as those caused by oral surgery or ill-fitting dentures or braces. MuGard was launched in 2010 after receiving 510(k) clearance from the US Food and Drug Administration.
AMAG Pharmaceuticals, Inc. is a specialty pharmaceutical company that markets Feraheme and MuGard in the United States. Along with driving organic growth of its products, AMAG intends to expand its portfolio with additional commercial-stage specialty products.