Neurocrine Biosciences Inc. agreed to buy all of Wyeth's financial interest in the Phase III insomnia drug indiplon for $95 million.
The transaction is expected to be approved under antitrust laws in about 30 days, at which time Neurocrine will pay Wyeth $50 million in cash plus $45 million in Neurocrine common stock based on the average price over the 15 days prior to the signing the agreement.
"This is a great financial deal for us," said Gary Lyons, president and CEO of Neurocrine, a San Diego-based company with $430 million in the bank and a lucrative partnership with Pfizer Inc. to develop and commercialize indiplon.
On closing the deal with Madison, N.J.-based Wyeth, Neurocrine will gain all ownership and control over the indiplon composition of matter patent, which expires in 2020.
Neurocrine's stock (NASDA:NBIX) rose $3.01 Friday to close at $55.60.
Indiplon, a non-benzodiazapine agent, was the subject of a licensing agreement between Wyeth and DOV Pharmaceutical Inc., of Hackensack, N.J., signed in 1998. DOV licensed the candidate to Neurocrine, which entered a $400 million deal with Pfizer, of New York, to take the product to market. (See BioWorld Today, July 10, 1998, and Dec. 20, 2002.)
Five years down the road with all those hands in the royalty pot, Neurocrine was moved to simplify the arrangement for its financial gain.
By acquiring Wyeth's interest in indiplon, Neurocrine gets out of having to pay the larger pharma 2.5 percent in royalties. However, Neurocrine will have to pay DOV 3.5 percent in royalties.
Meanwhile, Pfizer, the worldwide partner, will pay Neurocrine about 30 percent in royalties, according to analyst reports.
"This was all very confusing," Lyons said. "For that reason, Wyeth was removed from the equation, so they have no remaining interest in this product - it is ours."
Indeed, Lyons said savings on royalties would go directly to Neurocrine's earnings. "This will be positive in our earnings for the first year, and every year thereafter," he said.
Another positive piece of the puzzle is the relationship with Pfizer. On signing the deal, Neurocrine received a $100 million payment and is expecting to receive another $300 million in milestones down the road. Pfizer is paying all development costs and will help Neurocrine build a 200-member sales force that also will handle certain U.S. sales of Pfizer's antidepressant, Zoloft.
The psychiatric sales force eventually will handle indiplon as well.
Indiplon has been shown to bind selectively to the specific subtype of GABA-A receptors within the brain believed to be responsible for promoting sleep, the company said.
Lyons told BioWorld Today he expects to file for regulatory approval in mid-2004 for both the immediate-release capsule form and longer-acting tablet form. The proposed indications will be sleep initiation, middle-of-the-night dosing, sleep maintenance and long-term treatment. Lyons believes the application will be reviewed under a standard 10-month cycle.
The indiplon clinical program includes 10 Phase III trials that will generate data from about 5,000 people.
In the last week, the company said its Phase III study of the immediate-release formulation at 5 mg and 10 mg in elderly patients with chronic insomnia achieved statistical significance. Results of the primary endpoint for the study, latency to sleep onset, was statistically significant for both doses (p<0.02 at 5 mg and p<0.005 at 10 mg), compared to placebo.
Preliminary data from an earlier Phase II/III study of the immediate-release capsule in chronic sufferers demonstrated that patients who woke up in the middle of the night and had difficulty falling back to sleep were able to return to sleep with fewer sleep interruptions after taking indiplon. Also, there was no evidence of next-morning residual effects and patients taking indiplon demonstrated more next-day alertness than those who took placebo.
Preliminary top-line results from a Phase III using the 30-mg modified-release formulation in chronic patients also reached statistical significance, showing that patients who took the candidate fell asleep more rapidly and stayed asleep longer. More specifically, the modified-release formulation of indiplon following nightly administration of 30 mg over a two-week period demonstrated an improvement in the primary endpoint of patient-reported total sleep time relative to placebo at both the first week (p<0.0001) and the second week (p<0.004).