Pain-relief specialist Alpharma
Alpharma announced yesterday that it licensed the Flector patch from privately owned Institut Biochimique SA. Alpharma will make an up-front $100 million payment and issue stock warrants for 1 million shares, with a three-year term and a $35 strike price. Alpharma will get to keep all the U.S. profits, since there aren't any royalty payments associated with the deal.
Flector was approved in January by the FDA, and it'll be the first topical NSAID patch available in the U.S. It has been marketed in Europe for many years by Institut Biochimique and Novartis
The patch delivers the NSAID diclofenac epolamine directly to the site of acute pain, while keeping the overall level of diclofenac in the body relatively low. NSAIDs taken orally can cause both cardiovascular problems as well as gastrointestinal issues -- if you've ever taken Wyeth's
To support the 2008 launch, Alpharma plans to double its sales force to about 400 sales reps, while adding further sales reps from a contract sales organization (CSO). It expects to ramp up sales and show positive earnings from the patch in the second half of 2009, with peak sales of $500 million per year.
That should coincide nicely with its KADIAN NT abuse-deterrent opioid, which it hopes to launch in 2009. Having a large sales force already in place should help it compete against Pain Therapeutics'
Alpharma also acquired the marketing rights to Tirosint, a thyroid replacement therapy. I'm not sure whether Institut Biochimique was having a 2-for-1 sale or what, but Alpharma shouldn't be touching Tirosint with a 10-foot pole. It doesn't appear to have the experience or sales force to deal with launching the drug. With any luck, it will find a partner to which it can outlicense Tirosint relatively quickly -- perhaps Forest Laboratories
Overall, I think the deal is a good one for Alpharma. Low-risk licensing deals for FDA-approved drugs are hard to come by, and this one will allow it to leverage its current sales force almost immediately. The launch will cut into its near-term earnings, but should help it in 2009 and beyond.