GSK subsidiary pays $227 million for rights to Basilea Pharmaceutica eczema drug

Stiefel buys rights to Toctino, which is commercially available in 14 countries and approved in another 15 countries to treat adults with severe chronic hand eczema that is refractory to treatment with potent topical corticosteroids

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BASEL, Switzerland—Basilea Pharmaceutica Ltd. recentlyentered into an exclusive worldwide agreement under which Stiefel, aGlaxoSmithKline (GSK)-owned dermatology company, will pay  $227 million for control of Toctino, acompound for the treatment of adults with severe chronic hand eczema that isrefractory to treatment with potent topical corticosteroids.
Basliea's Toctino (alitretinoin) is commerciallyavailable in 14 countries and approved in another 15 countries—in the UnitedStates, oral alitretinoin is an investigational drug in a phase III trial. Withthe transaction's completion, Stiefel will assume responsibility for thedevelopment, manufacturing, commercialization and distribution of the product.Existing Toctino distribution agreements in Europe, Canada, Mexico, Israel andthe Republic of Korea will be assigned to Stiefel.
In addition to the upfront payment of $227million, Basilea will be eligible for additional milestone payments of between $46.6million and $77.8 million related to a regulatory milestone of alitretinoin inthe United States. Basilea will also receive low double-digit participation inU.S. sales starting three years after launch.
"Through this transaction, we are immediatelyaccessing the value of Toctino and we will be able to further focus our strategyon solving the massive healthcare threat of resistance in the areas ofanti-infectives and oncology," said Dr. Anthony Man, CEO of Basilea. "Thistransaction provides us with non-dilutive capital to achieve our clinicalmilestones that are key to optimizing shareholder value. It also gives us theflexibility to selectively add products or product portfolios that addressresistance to current therapies in our focus areas of anti-infectives andoncology."
Specific plans for the money include applying the capitalto support the regulatory filing of ceftobiprole for the treatment of pneumoniain the hospital in Europe this year and subsequently in the United States, aswell as completing a phase III program for the antifungal agent isavuconazole. Althoughthose are the two main goals, money will also be used to advance phase Icompounds addressing resistant Gram-negative bacterial infections and drugresistance to current anti-tumor therapies.
Employees at Basilea's European affiliates andSwiss headquarters who are actively involved in the commercialization anddistribution of Toctino will have the right to transfer to Stiefel uponcompletion of the transaction.
Of course, while $227 million is no tiny amount ofmoney, the GSK-Basilea deal does pale a bit in the shadow of GSK's ongoing $2.6billion hostile takeover attempt of Human Genome Sciences Inc., not to mentionnew rumors circulating June 12 that GSK is also aiming to acquire BioMarinPharmaceutical Inc.,  a company that researches anddevelops therapies for chronic genetic disorders causing enzyme deficiency ofcarbohydrate metabolism, for $5 billion.

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