Pfizer Inc. to acquire Cupertino, California-based NextWave Pharmaceuticals, a privately held, specialty pharmaceutical company focused on the development and commercialization of unique products for the treatment of ADHD and related CNS disorders.

NextWave is the developer of Quillivant XR (methylphenidate hydrochloride) for extended-release oral suspension, CII, the first once-daily liquid medication approved in the US for the treatment of ADHD, and holds exclusive North American commercialization rights to Quillivant XR. Quillivant XR received approval from the US Food and Drug Administration on September 27, 2012, and is expected to be available in pharmacies in the US in January 2013.

Quillivant XR was developed in collaboration with Tris Pharma, NextWave’s technology and manufacturing partner. Quillivant XR is built on Tris’ OralXR+ platform.

Pfizer had previously entered into an option and merger agreement with NextWave during the second quarter 2012 and made an option payment of $20 million. Yesterday, Pfizer had exercised its option to acquire NextWave.

Under the terms of the agreement, Pfizer will make a payment to of $255 million to NextWave’s shareholders at the closing of the transaction, and NextWave’s shareholders are eligible to receive additional payments of up to $425 million based on certain sales milestones.

“This agreement demonstrates our focused expansion of the Established Products US brands business to offer a diverse portfolio of high-quality medicines that meet patients’ needs,” said Albert Bourla, president and general manager in Pfizer’s Established Products Business Unit. “By combining the advantages of Quillivant XR with Pfizer’s commercialization expertise, we will be able to provide ADHD patients and their caregivers a new treatment option.”

“NextWave has been focused on helping patients and families who struggle with the challenges of ADHD. We are excited to partner with Pfizer, one of the most respected pharmaceutical organizations in the world, to bring the unique benefits of Quillivant XR to those affected by this challenging condition,” said Jay P Shepard, president and chief executive officer of NextWave.

The transaction is expected to close during the fourth-quarter 2012, subject to regulatory approval in the United States, and other customary closing conditions.

Pfizer’s financial advisor for the transaction was Jefferies & Company, Inc. Pfizer Legal Alliance (PLA) firms Kaye Scholer LLP and Ropes & Gray LLP acted as legal counsel. The PLA is a collaborative partnership between Pfizer and 19 law firms. NextWave’s financial advisor for the transaction was Aquilo Partners, L.P., while Cooley LLP served as its legal advisor.