By Kim Coghill
Connetics Corp. has sold the rights to Ridaura, its rheumatoid arthritis product, to Prometheus Laboratories Inc.
Under terms of the deal, San Diego-based Prometheus, which is privately held, will pay $9 million in cash plus a royalty on annual sales in excess of $4 million for the next five years.
John Higgins, chief financial officer for Palo Alto, Calif.-based Connetics, said cash from the transaction will bolster the company¿s balance sheet as it continues to explore opportunities in the dermatology business.
Ridaura is being sold because it does not fit into Connetics¿ strategic focus, Higgins said. ¿It¿s a good product, and in the last couple of years we had another product [relaxin] in development and if it had been successful in trials, it also would have been used by rheumatologists,¿ he told BioWorld Today.
But since relaxin failed to meet its primary endpoint in a Phase III trial last fall, Connetics began de-emphasizing its sales and marketing of such products. The trial was investigating recombinant human relaxin in the treatment of diffuse systemic sclerosis, also known as scleroderma. Based on the preliminary results, the company decided against filing a biologic license application.
Higgins said relaxin is being studied for other indications.
Connetics has two dermatology products on the market: Luxiq, which was launched in early 1999, and OLUX, launched in November. Both are foam-based products for the treatment of scalp dermatoses.
In April, Connetics acquired Soltec Research Pty. Ltd., a division of Australia-based F.H. Faulting & Co. Ltd., for A$32 million (US$16.2 million). Luxiq and OLUX are based on the technology developed by Soltec. (See BioWorld Today, March 22, 2001.)
The acquisition is expected to provide Connetics with product innovation and development capabilities, fuel an extensive new product pipeline and contribute revenue and profits to Connetics¿ financial results, Connetics said in a prepared statement.
Connetics released financial results for the quarter ended March 31, 2001, that show record product revenues of $7.7 million as compared to $5.7 million in the first quarter 2000.