Almost two weeks after terminating a Phase II Prosaptide analgesia study, Savient Pharmaceuticals Inc. signed a definitive agreement to sell its global biologics manufacturing business to Ferring BV and Ferring International Centre SA for $80 million in cash.

The two Ferring businesses are subsidiaries of privately held Ferring Holding SA, of Lausanne, Switzerland.

East Brunswick, N.J.-based Savient expects to receive the money in three installments: $55 million at closing, $15 million at the first anniversary of closing and $10 million at the second anniversary.

"We are very pleased with the agreement," said Christopher Clement, president and CEO of Savient.

"During the process we received considerable interest in the business and reviewed several competitive offers," he said. "We believe the transaction announced today is the most attractive."

Savient has had an established relationship with Ferring since 1992, and the transaction price was the highest offer. By selling its manufacturing business in Israel, including its subsidiary Bio-Technology General Ltd., Savient gains the ability to build a sales force and to become more profitable.

The company expects to receive $70 million in net proceeds from the transaction if it is completed within six months.

"As a result, we will emerge with significant cash resources and free of debt," Clement said.

Boards of both companies have approved the transaction, and the closing is expected by the end of the first half of this year.

Savient announced earlier this month plans to terminate its Phase II Prosaptide analgesia study when an interim analysis indicated the product would not reach its efficacy endpoint. The company expects to know later this year whether it will pursue alternative analgesia indications, or to further explore the product in treating peripheral neuropathy in HIV/AIDS and other diseases. (See BioWorld Today, March 14, 2005.)

The decision to sell the manufacturing business, however, was part of a strategy announced last summer to reposition Savient to focus on developing its pipeline products. The company also reduced its work force last October by 9 percent, saving about $2.8 million net per year.

Proceeds from the divestiture will fund the lead drug Puricase to treat severe refractory gout in upcoming Phase III trials. The product is nearing completion of Phase II trials in the U.S. The company also plans to use proceeds to in-license clinical-stage compounds and marketed products.

The manufacturing business features a portfolio of seven products, including Bio-Tropin human growth hormone, Nuflexxa hyaluronic acid for amelioration of knee pain due to osteoarthritis, BioLon hyaluronic acid for use in surgery, Bio-Hep-B recombinant hepatitis B vaccine, insulin, Fibrimage radiopharmaceutical product for diagnosis of deep-vein thrombosis and pulmonary embolism, and a development-stage generic biologic product.

In a separate agreement, Savient and Ferring will co-promote Nuflexxa in the U.S. as long as the sale of the manufacturing business is completed as planned. The product received FDA approval in December and should be launched in the second half of 2005.

Nuflexxa would be the fifth product of its kind on the market, which is dominated by Cambridge, Mass.-based Genzyme Corp.'s Synvisc.

"The U.S. market, which is by far the largest for hyaluronic acid, is approximately $350 million," Clement said, "and it's been growing at about 10 percent per year."

In the U.S., Savient will target rheumatologists and Ferring will sell to orthopedic surgeons. Nuflexxa also is approved in Europe and will be marketed there under the brand name Euflexxa. Ferring will market to all physicians outside of the U.S.

Savient plans to establish its new sales force through a $20 million investment over the first two years of the agreement, which extends through the end of 2008. In return, Savient will receive 50 percent of the global revenue of Nuflexxa above certain revenue thresholds. It will continue its investment beyond the first two years depending on the achievement of those thresholds.

The new sales force is a strategic move for Savient, which hopes to soon start Phase III trials of Puricase.

"This is a major opportunity," Clement said, "for Savient to build the necessary visibility for us within the rheumatology community for the commercialization of Puricase."

Savient's stock (NASDAQ:SVNT) rose 5 cents Wednesday to close at $2.83.