By Brady Huggett
Questcor Pharmaceuticals Inc. agreed to sell exclusive rights to its antiviral drug research technologies to Rigel Pharmaceuticals Inc. as part of Questcor's continuing commitment to develop and market late-stage pharmaceutical products, forgoing discovery.
"We are pleased to have entered into this agreement with Rigel," said Hans Schmid, Questcor's vice president, finance and administration and chief financial officer. "We believe Rigel has the ability to successfully develop and commercialize this technology."
Questcor, of Hayward, Calif., agreed to sell to Rigel, of South San Francisco, certain antiviral technology, including its hepatitis C drug discovery technology, for the research, development and commercialization of pharmaceutical products. It also transferred exclusive rights to certain patents, high-throughput assays and compounds related to its hepatitis C drug discovery technology for future development by Rigel. In return, Questcor will receive an undisclosed amount of cash, a payment of Rigel stock and potential milestones and royalties.
"We are an emerging pharmaceutical company with increasing needs for funding," he said. "It would be fair to say that this will be financially positive for us."
Questcor had approximately $9 million in cash and cash equivalents at the end of the second quarter.
Questcor was formed from the merger of RiboGene Inc. and Cypros Pharmaceutical Corp. in November 1999. From the start, Questcor was to be a late-stage pharmaceutical product development and marketing company, and earlier this year it licensed out certain antibacterial drug discovery programs to Dainippon Pharmaceutical Co. Ltd., of Osaka, Japan, as part of its new direction.
Schmid said Questcor will use the funds from the deal to concentrate on the company's late-stage clinical development projects. Questcor has three products in ongoing clinical trials: Cordox, a blood preservative agent; Ceresine, for the treatment of congenital lactic acidosis; and Emitasol, for diabetic gastroparesis. Schmid said Emitasol is on track to commence a pivotal Phase III clinical trial next year.
Rigel is a post-genomics combinatorial biology company focused on discovering new drug targets and developing a portfolio of drug candidates. It currently has nine product development programs in immunology and cancer. Rigel said it was going public in February, looking to raise about $100 million, but it pulled the offering in April due to poor market conditions. Rigel again filed for an initial public offering on Sept. 15, intending to raise about $90 million through the sale of 9 million shares. The company is in a quiet period and could not comment on the Questcor deal. (See BioWorld Today, Feb. 2, 2000; April 14, 2000; and Sept. 18, 2000.)
Schmid said the selling of the rights and patents is good for both companies.
"I believe Questcor has found in Rigel a partner that can bring this technology to the commercial arena," Schmid said. "If the commercialization of the products using our technology is successful, Questcor shareholders should see benefits from future royalties and milestone payments."
Questcor's stock (AMEX:QSC) closed unchanged Wednesday at $1.562. n