Indevus Pharmaceuticals Inc. announced that Allergan, Inc., through its acquisition of Esprit Pharma, has obtained the United States rights to Sanctura and Sanctura XR.
In connection with Allergan's acquisition of Esprit Pharma, Indevus has executed an amended and restated license, commercialization and supply agreement with Esprit Pharma that will be effective, with certain exceptions, on the closing of the acquisition. The acquisition of Esprit Pharma is expected to be completed by the end of October 2007.
"We are extremely pleased to see Sanctura XR now in the hands of a company with the resources and experience to maximize what we believe is a class- leading opportunity" said Glenn L. Cooper, M.D., chief executive officer and chairman of Indevus. "Allergan has a proven record of success in marketing specialty pharmaceuticals, and with their leadership I am quite optimistic that Sanctura XR will be in a strong position to achieve its full potential. We look forward to working with Allergan over the coming months to prepare for a successful launch of Sanctura XR and upon launch, to achieving new levels of success in our co-promotion of Sanctura XR."
On August 6, 2007, Indevus announced that Sanctura XR (trospium chloride extended release capsules) was approved by the US Food and Drug Administration (FDA). Sanctura XR is indicated for the once-daily treatment of overactive bladder (OAB) with symptoms of urge urinary incontinence, urgency, and urinary frequency. Following the approval, the company received a $49.9 million milestone payment from Esprit Pharma, the company's partner in the US for Sanctura and Sanctura XR. The milestone payment was based on the total costs to develop Sanctura XR, including clinical development, as well as manufacturing development costs.
Under the terms of the amended and restated license, commercialization and supply agreement, Allergan will be responsible for all marketing and sales activities. Indevus will be responsible for supply of Sanctura XR through June 30, 2008. Beginning in July 2008, Allergan will assume manufacturing responsibilities for Sanctura XR. Upon closing of this agreement, Allergan will pay Indevus an upfront license fee of $25 million, a portion of which will begin to be creditable by Allergan in 2010, against certain future payments owed to Indevus.
Allergan will also pay Indevus royalties on net sales of Sanctura and Sanctura XR of 12.5 per cent and will reimburse Indevus for required royalty payments to Indevus' licensors. For a period of seven years, the royalties payable to Indevus will be subject to a guaranteed minimum level, except under specified conditions. The guaranteed minimum royalties will be as follows: 2008 - $8.1 million, 2009 - $10.6 million, 2010 - $15.6 million, 2011 - $18.1 million, 2012 - $20.6 million, 2013 - $23.5 million, 2014 - $26.3 million. Indevus will also receive a milestone payment of $20 million in December 2013 based on certain market exclusivity conditions.
Additionally, Indevus will continue to co-promote Sanctura XR through September 2008 and will receive a quarterly sales force subsidy at a $9.3 million annual rate. Indevus will also have the option to continue co- promoting Sanctura XR for an additional six months after September 2008 at the same rate.
As a result of the amended and restated license, commercialization and supply agreement, Indevus has determined that the amended contract will be accounted for as one unit of accounting. Accordingly, all revenue generated by the company under the agreement, including related previously deferred revenue, will be recognized using the contingency adjusted performance method of accounting over the company's five year performance period.
The transaction with Allergan does not change the company's previously announced licensing agreement with Madaus GmbH to sell Sanctura XR in certain territories outside the United States. Under the terms of that agreement, Madaus has the rights to sell Sanctura XR outside the US except in Canada, Japan, Korea and China, where Indevus and Madaus will share equally in the economics.