By Kim Coghill
Cephalon Inc. will spend in excess of $100 million during the next four years to purchase the U.S. product rights to Gabitril, an anti-epileptic drug manufactured by Abbott Laboratories.
Cephalon and Abbott Park, Ill.-based Abbott in June 1999 entered an agreement to market and further develop Gabitril (tiagabine hydrochloride), but under terms of the new deal, Cephalon will be the sole U.S. owner. In addition to the $100 million payment, West Chester, Pa.-based Cephalon will make other payments based on the product's patent life.
"We are interested in Gabitril because we believe it has market potential," said Kevin Buchi, Cephalon's senior vice president and chief financial officer. "In doing this, we have complete control over the drug and we will further develop it."
Abbott will continue to manufacture Gabitril for Cephalon, according to Sheryl Williams, Cephalon's associate director for product communications. "We will assume direct responsibility at some point in the future, but I do not have a detailed time frame except to say sometime in the future."
Neither Williams nor Buchi would speculate on the amount of revenue Gabitril is expected to generate, but did say in 1999 the drug's U.S. sales were between $20 million and $22 million.
However, the drug could be a heavy revenue producer as its uses are expanded. For example, Williams said it is believed the product can be used for spasticity, a condition in which the muscles become spastic.
"We believe there is potential for the drug outside epilepsy," Williams said. "We do not currently have a full development plan in place as of yet, but that is one of the things we will be doing now that we have the compound."
Abbott could not be reached for comment, but in a prepared statement, Arthur Higgins, its senior vice president, said, "Cephalon has been an excellent partner to work with over the past year. We are pleased to transfer the rights to Gabitril to Cephalon, which will be well positioned to maximize its potential from a scientific and commercial standpoint." He said the transfer allows Abbott to focus on Depakote, its product used in the treatment of manic episodes associated with bipolar disorder.
Gabitril is an adjunctive anti-epilepsy drug used for the treatment of partial seizures, a form of epilepsy in adults and children 12 years and older. Studies have shown that Gabitril is effective in reducing the frequency of partial seizures when added to an existing regimen of at least one other anti-epilepsy drug.
Cephalon entered the 1999 agreement with Abbott to co-market Gabitril in order to increase the number of products Cephalon's sales force was detailing, Williams said. At that time, the 200-strong Cephalon sales team was selling only Provigil (modafinil), a tablet for the treatment of excessive daytime sleepiness associated with narcolepsy.
"Our sales force is specialized and has a lot of experience in the neurology community so it was a good relationship for us," Williams said.
Other than Provigil and Gabitril, Cephalon also markets Actiq, an oral transmucosal fentanyl citrate marketed for the treatment of breakthrough cancer pain. Cephalon acquired Actiq through its October merger with Salt Lake City-based Anesta Corp. in a stock-for-stock deal worth about $444 million. (See BioWorld Today, July 18, 2000.)
Cephalon's stock (NASDAQ:CEPH) gained $3.312 Wednesday to close at $56.937.