West Coast Editor
In a financing environment that's less than ideal for biotechnology firms, Reliant Pharmaceuticals Inc. is shooting to raise $300 million with its initial public offering, though the company did not specify the number of shares or the price per share.
Reliant, of Liberty Corner, N.J., is about 60 percent owned, on an as-converted basis, by the trio of PharmBay Investors LLC, Bay City Capital LLC and Alkermes Inc. - the last of which once planned to merge with Reliant.
Focused on cardiovascular drugs, Reliant was founded in August 1999 and started operating the next year when it bought rights to three marketed brands. The firm since has bought another drug, along with three late-stage clinical development compounds, two of which recently won FDA approval.
Revenues last year from product sales added up to about $117.2 million, driven mainly by Reliant's DynaCirc CR for hypertension and the Rythmol family of products for arrhythmia. The firm licensed U.S. rights for DynaCirc from Novartis AG, of Basel, Switzerland, in July 2000, and bought those rights in March 2003. Rythmol, purchased from Abbott Laboratories in December 2003, was launched the following year.
The active ingredient in DynaCirc and DynaCirc CR (a controlled-release, once-daily formulation) is the calcium channel blocker isradipine. The class of drugs as a whole sold about $4.5 billion last year, with the DynaCirc group taking $56.3 million, a 42 percent increase over the previous year. Reliant is working on an improved formulation of the controlled-release product.
Rythmol and Rythmol SR (a sustained-release, twice-daily formulation) use propafenone, approved for irregular heart rhythm. Sales of anti-arrhythmics hit about $366 million last year, and the Rythmol group sold $48.8 million, a 126 percent jump over net sales in the 12 months ended November 2003, before Reliant acquired the brand.
The most recent launch, in February, was Antara, for the management of cholesterol levels. Jointly developed with Ethypharm SA, of Paris, Antara was approved in November. Reliant licensed North American rights from Ethypharm in May 2001. Antara is a once-daily formulation of fenofibrate. For the quarter ended March 31, Antara's net sales totaled $4.4 million, mainly as a result of wholesaler and retailer inventory stocking.
Another in the lineup is Omacor, for high triglycerides, also approved in November. The drug contains highly purified omega-3 acid ethyl esters, mainly eicosapentaenoic acid and docosahexaenoic acid, and is the first product in its class for the treatment of triglyceride concentrations in the blood 500 mg/dL and greater. Reliant plans to launch Omacor - already available in Europe - late this year in the U.S., and is developing it for other uses, as well as in combination with other approved compounds.
Overseas sales totaled about $151.1 million, of which about $140.6 million were in Italy.
Lescol and Lescol XL (an extended-release formulation) are statins for high cholesterol launched in November 2000, when Reliant entered a promotion agreement with Novartis that later was extended through 2007. The main efforts have been focused on the XL version, with Reliant pulling down promotion revenues of $105.1 million, down 13 percent from the previous year.
Though largely devoted to acquiring drugs, Reliant does have internal programs that have yielded the likes of InnoPran XL, an extended-release formulation of the beta-blocker propranolol, for high blood pressure. Reliant came up with the compound by using a proprietary drug release system, global rights to which were licensed from Eurand International SpA, of Milan, Italy, in 2000.
The FDA approved InnoPran XL in March 2003, and Reliant began actively promoting the drug in January 2004, gaining net sales last year of $7 million.
The planned merger with part owner Cambridge, Mass.-based Alkermes fizzled after the FDA sent a non-approvable letter to Alkermes regarding Risperdal Consta, the long-acting injectable form of risperidone to be given once every two weeks to manage schizophrenia. A drop in stock prices devalued that deal by nearly $675 million from its original assumed price of $934 million, disclosed in March 2002. Alkermes reduced staff by 23 percent, and the drug ultimately won approval in the fall of 2003. (See BioWorld Today, Oct. 31, 2003.)
Reliant plans to use the IPO proceeds to buy more drugs and drug candidates, boost promotion of the existing portfolio and fund clinical development, as well as for general corporate purposes. The firm seeks to trade on the New York Stock Exchange under the symbol "RRX." Goldman, Sachs & Co. in New York will act as the lead manager and sole book-runner for the IPO.