Giving investors a welcome surprise, QLT
Even though Aczone won FDA approval in mid-2005, it previously bore a restrictive and onerous label that required blood testing before its use. QLT didn't even bother to market the drug after former partner Astellas gave up on the compound two days before its approval. Now that the Aczone label has been loosened, the drug may gain appeal among dermatologists who would have understandably balked at the testing it formerly required.
Since last year, QLT has been searching for a potential buyer of its stake in Eligard and Aczone. Obviously, the less restrictive label makes Aczone a much more valuable asset. When the drug won approval three years ago, QLT estimated the total topical prescription-drug acne market at $800 million.
What would another drugmaker pay for a compound like Aczone? Other acne drugs like Roche's Accutane are now genericized products, but a compound like Aczone would fit well into the product portfolio of a health-care company like Allergan
In my very unempirical estimate, Aczone might fetch anywhere from $50 million to $100 million for North American marketing rights, plus single-digit royalties to QLT. That may not sound like a lot of cash, but QLT is only trading at a market capitalization around $240 million. No wonder shares of QLT jumped more than 40% on news of the FDA's unexpected benevolence.