Egalet, Shionogi announce opioid agreement

The deal could be worth a total of $425 million if all milestones are met

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MALVERN, Pa.—Specialty pharmaceutical company Egalet Corporation, which focuses on proprietary, abuse-deterrent oral products for pain and other indications, has announced the establishment of a definitive collaboration and license agreement with Shionogi Limited to develop and potentially commercialize multiple oral abuse-deterrent hydrocodone opioid product candidates based on Egalet’s proprietary technology.
Per the terms of the agreement, Shionogi will pay Egalet $10 million up front, and Shionogi has also agreed to purchase up to roughly $15 million in common stock in a private placement, which will close with the initial public offering recently announced by Egalet. In addition, Egalet will be eligible to receive milestone payments if development and approval milestones are met, for a potential total of more than $300 million if several products gain approval. Shionogi will bear all costs associated with product development, and will hold exclusive global rights to commercialize the products that result from the agreement. Should any products gain marketing approval, Egalet will be eligible for tiered royalties from the mid-single digits to the low double digits based on nets sales, in addition to sales-based milestone payments that could total more than $100 million.
“With their commitment to pain therapeutics and their strong sales and marketing capabilities, we are pleased to be collaborating with Shionogi for the development and potential commercialization of abuse-deterrent hydrocodone products using our proprietary technology,” Bob Radie, president and CEO of Egalet, said in a press release regarding the agreement. “We believe this collaboration provides validation for our proprietary abuse-deterrent drug delivery platform and positions us to capitalize on our technology, both through the products to be developed under the collaboration and by enabling us to develop additional opioid candidates utilizing our platform technology.”
Hydrocodone is an opioid agonist used to treat mild to moderate pain, and is currently offered as either a single agent or in combination with other pain management drugs such as acetaminophen. Given the growing issue of drug abuse with regards to opioids, Egalet is advancing a number of opioid-based drug candidates designed “to deter abuse by physical and chemical manipulation while also providing the ability to tailor the release of the [active pharmaceutical ingredient],” the company notes on its website. Two products are already in clinical-stage development: its lead compounds, Egalet-001 and Egalet-002, both of which are abuse-deterrent, extended-release oral formulations of opioids indicated for treating moderate to severe pain.
Egalet announced in mid-September that it had closed a financing of up to $20 million, receiving $10 million initially with an option for an additional $10-million investment if certain conditions are met. The financing was led by Index Ventures, with other existing investors also participating. Radie noted in a press release announcing the financing that the company would be using the funds “to being our pivotal studies for Egalet-001 in the first quarter of 2014,” adding that they plan to submit a New Drug Application for the compound in Q4 of next year.
SOURCE: Egalet press release

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