Horizon to acquire U.S. rights to VIMOVO

Horizon will pay $35 million to AstraZeneca up front for the rights, as well as royalties to Pozen

Kelsey Kaustinen
DEERFIELD, Ill.—Horizon Pharma Inc. has announced the establishment of an agreement with AstraZeneca AB to acquire the U.S. rights to VIMOVO delayed-release tablets. VIMOVO is approved in the United States to treat pain caused by osteoarthritis, rheumatoid arthritis and ankylosing spondylitis, and to lessen the risk of stomach ulcers in patients at risk of developing stomach ulcers due to treatment with non-steroidal anti-inflammatory drugs (NSAIDs). AstraZeneca has licensed the drug from the pharmaceutical company Pozen.
 
Per the terms of the agreement, Horizon will pay AstraZeneca $35 million up front for the U.S. rights to the drug. Horizon will also pay a 10-percent royalty on net sales to Pozen, as well as annual minimum royalties of $5 million in 2014 and $7.5 million each year from then on, so long as Pozen’s patents covering VIMOVO remain in effect and no generic forms of the drug enter the market. AstraZeneca will continue to distribute VIMOVO and book revenues for the drug for the remained of Q4 2013, and Horizon will receive any related net profits from AstraZeneca. The transaction is expected to be accretive to Horizon’s non-GAAP net income in 2014. For this transaction, Horizon enlisted JMP Securities LLC as its financial advisor, with Cooley LLP serving as its legal advisor.
 
“The acquisition of VIMOVO is a major step forward in our strategy to leverage our business model and maximize our commercial infrastructure, and we expect it to create significant value for our shareholders,” Timothy P. Walbert, chairman, president and CEO of Horizon, said in a press release. “We anticipate that this transaction will significantly increase our revenues and accelerate the Company to profitable operations.”
 
Horizon plans to begin selling VIMOVO in the first quarter of next year, and will be expanding its primary care sales force from 150 to roughly 250 sales representatives to support the initiative. Its rheumatology specialty sales force will also be increased, from 25 to approximately 40 representatives. Horizon also intends to include the drug in its Prescriptions-Made-Easy specialty pharmacy program so that patients can have access to the drug at a reasonable out-of-pocket cost. The company expects to price VIMOVO similarly to DUEXIS and other branded NSAIDs, and forecasts gross-to-net sales deductions of the drug to fall somewhere between 35 percent and 40 percent.
 
VIMOVO adds another arthritis treatment to Horizon’s portfolio, joining DUEXIS, a NSAID for treating arthritis pain in patients who face stomach problems brought on by pain medication, and RAYOS (generically known as Prednisone), which is also indicated for pain management.
 
Along with the announcement of the VIMOVO acquisition, Horizon released details of its 2014 full-year financial guidance. The company is forecasting full-year net revenue for 2014 of $190 million to $205 million, and expects to be profitable next year on a non-GAAP basis. The same day as the VIMOVO press release, Horizon also announced that it has entered into note purchase agreements with its investor to issue $150 million aggregate principal amount of 5 percent convertible senior notes due 2018, with an initial conversion price of $5.36. The purchase of the notes is expected to close November 22, and Horizon expects net proceeds of $143.8 million, $35 million of which will be used to fund its acquisition of VIMOVO.

Kelsey Kaustinen

Subscribe to Newsletter
Subscribe to our eNewsletters

Stay connected with all of the latest from Drug Discovery News.

February 2023 Front Cover

Latest Issue  

• Volume 19 • Issue 2 • February 2023

February 2023

February 2023 Issue