Advancis Pharmaceutical has acquired the US rights to the Keflex brand of cephalexin from Eli Lilly and Company (Lilly), according to a release.
Under the terms of the agreement, Advancis paid Lilly $11 million for the exclusive rights to manufacture, market and sell Keflex (cephalexin capsules, USP) in the US. With the acquisition, Advancis acquires Keflex trademarks, technology, and new drug applications (NDAs) supporting the approval of Keflex. Following a transition period, Advancis will assume product inventory and begin marketing and distributing the Keflex brand.
In addition to assuming sales and marketing responsibilities for Keflex, Advancis expects to begin clinical development of an enhanced cephalexin utilizing Advancis' proprietary once-a-day pulsatile dosing technology called Pulsys. Cephalexin is currently dosed two to four times daily for a period of seven to fourteen days. Advancis' initial preclinical data support the Company's intention to develop a once-daily version of cephalexin. With the acquisition of Keflex, Advancis now has under development Pulsys versions of three of the top five most-prescribed antibiotics in the United States; the other products are amoxicillin, partnered with Par Pharmaceutical and amoxicillin/clavulanate, partnered with GlaxoSmithKline, the release says.
"The acquisition of Keflex is an illustration of our ongoing mission to develop and acquire antibiotic products that we believe can be improved through our novel pulsatile approach," said Edward M Rudnic, chairman, president, and CEO of Advancis. He added, "In addition, we believe the acquisition and subsequent sales of Keflex will enable us to prepare for the eventual commercialization of Pulsys products, including our recently announced lead product under development, Amoxicillin Pulsys."
The acquisition of Keflex marks a significant step in Advancis' transition to a fully integrated pharmaceutical company with commercial product sales. The Company expects to gain valuable experience in product sales and marketing, key account management, manufacturing, distribution, billing, and other essential commercial operations that could be leveraged for future proprietary products. Revenue from this product is expected to be used to develop the acquired assets and build these commercial capabilities in preparation for Pulsys products. Advancis expects to begin recognizing revenue from Keflex sales on July 1, 2004.
"Unlike most specialty pharma business models," Dr. Rudnic continued, "Advancis is in a unique position to greatly improve acquired products and ultimately launch re-invigorated brands. We believe that the near-universal recognition of the Keflex name and proven safety record for the compound will help pre-position the Pulsys version of the drug for launch."
The Pulsys technology has been developed to create anti-infective products that are taken once-daily, with a lower dose and a shorter duration of therapy. Cephalexin has been added to the Advancis preclinical product development pipeline and is the Company's tenth pulsatile antibiotic product program under preclinical or clinical development. Although preclinical data on Keflex Pulsys are promising, additional studies will be necessary to qualify cephalexin Pulsys as a clinical candidate. Advancis believes that cephalexin's relatively short half-life and rapid absorption make it a compelling candidate for the Company's proprietary pulsatile dosing approach. Additionally, limited indication overlap with other Advancis product candidates, the large number of cephalexin prescriptions, and the lack of brand competition in the cephalexin market make a Pulsys version of Keflex an attractive commercial opportunity.
Cephalexin is the third most prescribed outpatient antibiotic in the United States, with over 24 million prescriptions written and sales of $140 million in 2003. Keflex is the most-recognized brand of cephalexin in the United States with more than 15 million prescriptions written each year. Although the majority of these prescriptions are substituted with generic cephalexin, Lilly's Keflex net sales in 2003 were approximately $4 million. First introduced in the 1970s, Keflex is most commonly prescribed for skin and skin structure infections.