Danish drugmaker H. Lundbeck A/S plans to buy U.S. biotech Ovation Pharmaceuticals in a proposed $900 million deal that would give the Copenhagen-based company access to the U.S. commercial market.
The acquisition, which still needs to clear antitrust law, is expected to close in March, according to Lundbeck. The boards of both companies already have approved the transaction.
Under the proposed acquisition, Ovation employees and products would stay with company following the closing of the acquisition by Lundbeck, Ovation spokeswoman Sally Benjamin Young said. She called it "a strategic growth acquisition" aimed at growing the U.S. business.
As part of the agreement, Deerfield, Ill.-based Ovation would receive up to $900 million, with $300 million of that contingent on whether its epilepsy drug candidate, Sabril, is approved. An FDA advisory panel has recommended that the agency approve Sabril as a second-line treatment in adults, despite the potential risk of irreversible vision loss. (See BioWorld Today, Jan. 8, 2009.)
If Sabril is approved, the $300 million payment could come within a year of the closing.
Both Ovation and Lundbeck have a strong focus on diseases that affect the central nervous system. Lundbeck offers Lexapro, while Ovation's marketed products for CNS disorders include recently launched Xenazine for chorea, the movement disorder associated with Huntington's disease, Tranxene for anxiety disorders, Nembutal for acute convulsive disorders, Cogentin for Parkinson's disease and Desoxyn for attention deficit-hyperactivity disorder.
Ulf Wiinberg, president and CEO at Lundbeck, said in a statement that Ovation was "an excellent match." He added, "Ovation will provide a commercial platform in the U.S. with a highly experienced management team and specialty sales force, a late-stage development pipeline and a proven scientific and regulatory expertise in areas of high unmet medical needs."
A source close to the deal, who did not want to be named, said that Ovation's growth drivers are Xenazine and newly approved ATryn and its "strong pipeline."
Late last year, Ovation launched Xenazine in the U.S. for chorea associated with Huntington's disease. In the U.S., an estimated 25,000 Americans have the disease, and chorea is a primary symptom present in about 90 percent of Huntington's disease patients.
Another U.S. product launch is expected soon, now that the FDA has approved ATryn, a recombinant blood thinner. ATryn is owned by Framingham, Mass.-based GTC Biotherapeutics Inc., but Ovation has a license to sell it in the U.S.
Approved by the FDA last week, ATryn is expected to be available in the U.S. in the second quarter. It also is the first anticoagulant to be approved through a centralized procedure in Europe.
Derived from a protein found in the milk of genetically engineered goats, ATryn was developed for patients with a rare blood-clotting disorder (hereditary antithrombin deficiency) who are undergoing surgery or childbirth procedures. The prevalence of hereditary antithrombin deficiency in the general population is estimated to be about 1 in 2,000 to 1 in 5,000. Half of those patients may experience a thrombosis (blood clot) before age 25. Based on one study, up to 85 percent may suffer a thromboembolic event by age 50.
Behind Sabril, Ovation has two other programs in Phase III trials: clobazam for Lennox-Gastaut syndrome (catastrophic epilepsy) and intravenous carbamazepine, also for epilepsy.
Chicago-based private equity firm GTCR had partnered with Ovation CEO Jeffrey Aronin in 2002, providing capital for the company. Since that time, Ovation has made nine major acquisitions, including the license for Xenazine in the U.S.
Aronin said in a statement that, "During our partnership with GTCR, Ovation has been focused largely on developing drugs for severely ill patients where there is significant unmet medical need, and our new partnership with Lundbeck is a great milestone in that ongoing effort."