Forest Laboratories buys blood pressure drug Bystolic from Janssen Pharmaceutica for $357 million

Forest acquires all U.S. patents and other U.S. and Canadian intellectual property for Bystolic, which is currently approved in the United States for the treatment of hypertension, thereby eliminating all future royalties

Jeffrey Bouley
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NEW YORK—Forest Laboratories Inc. announced April2 that, through its wholly owned subsidiary Forest Laboratories Holdings Ltd.,it has forged a deal with Janssen Pharmaceutica NV to acquire all U.S. patentsand other U.S. and Canadian intellectual property for Bystolic (nebivolol),which is currently approved in the United States for the treatment ofhypertension, thereby eliminating all future royalties. The acquisition wascompleted simultaneously with the execution of the agreement on March 30.
Under the terms of this deal, Forest Labs made aone-time cash payment of $357 million to Johnson & Johnson-owned Janssen.In return, Janssen assigned to Forest all U.S. patents and other U.S. and Canadianknow-how covering Bystolic, including the nebivolol composition of matterpatent in the United States. Forest will amortize the one-time cash paymentover the remaining patent life of Bystolic.
In addition, contemporaneously with the closing ofthe acquisition, Forest and Janssen terminated the licenses in Canada for bothBystolic and Savella (milnacipran) with Janssen Pharmaceutica NV and JanssenPharmaceutical, respectively. Forest has now established its Canadiansubsidiary, which will take over the registration and commercialization of bothproducts.
"We are pleased with the success of Bystolic andwe look forward to the product's continued growth," said Howard Solomon, chairmanand CEO of Forest Laboratories. "Though it is the only branded beta-blocker inthe U.S. market, Bystolic now represents over 4 percent of this very largeclass and it continues to grow. Sales in the quarter ending December 31, 2011grew 33 percent over the same quarter last year. Forest will enjoy the fruitsof its further investment in the commercialization of Bystolic, as well as inavailable lifecycle strategies."
Bystolic was approved by the U.S. Food and DrugAdministration in 2007 for the treatment of hypertension. Bystolic is aonce-daily medication for lowering blood pressure when taken alone or incombination with other high blood pressure medications. It is available in 2.5mg, 5 mg, 10 mg and 20 mg tablets. In clinical trials, the discontinuation ratedue to adverse events was 2.8 percent for Bystolic versus 2.2 percent forplacebo. Nebivolol is approved and marketed in 60 countries outside of NorthAmerica.
In a March 16 investor note, Zacks InvestmentResearch gave a Neutral recommendation on Forest as it discussed the news that Forestand Janssen had recently filed a joint lawsuit against several genericcompanies that are looking to launch their own versions of Bystolic.
"The company is currently facing a major patentcliff with Lexapro, its key revenue generator, losing patent exclusivityrecently. While Teva launched its generic version of Lexapro recently, Mylan ismarketing an authorized generic version of the product," Zacks noted. "Anotherkey product, Namenda, in Forest Labs' portfolio could start facing genericcompetition in early 2015. To reduce the impact of genericization, Forest Labshas been working on developing its pipeline." 

Jeffrey Bouley

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