NEW YORK—Pfizer Inc. has announced its intent to acquireCupertino, Calif.-based NextWave Pharmaceuticals, a privately held specialtypharmaceutical company specializing in developing products for the treatment ofattention deficit hyperactivity disorder (ADHD) and related central nervoussystem disorders.
The two companies had previously entered into an option andmerger agreement during the second quarter of the year, during which Pfizermade an option payment to NextWave of $20 million. Pfizer is now exercising itsoption to acquire NextWave. Per the terms of the agreement, Pfizer will payNextWave's shareholders $255 million at the close of the transaction, and theshareholders will also be eligible to receive up to an additional $425 millionif certain sales milestones are met.
"NextWave has been focused on helping patients and familieswho struggle with the challenges of ADHD," Jay P. Shepard, president and CEO ofNextWave, said in a press release. "We are excited to partner with Pfizer, oneof the most respected pharmaceutical organizations in the world, to bring theunique benefits of Quillivant XR to those affected by this challengingcondition."
Quillivant XR for extended-release oral suspension, CII, isthe first once-daily liquid medication approved for the treatment of ADHD inthe United States. Quillivant XR was developed by NextWave in collaborationwith Tris Pharma, NextWave's technology and manufacturing partner, and wasdeveloped on Tris Pharma's OralXR+ platform. NextWave holds exclusive NorthAmerican commercialization rights to the drug, which gained U.S. Food and DrugAdministration approval on Sept. 27. The medication is expected to reachpharmacy shelves in January 2013.
NextWave could not be reached for additional comments on theacquisition, and Pfizer declined to provide an interview on the transaction atpresent.
NextWave's pipeline currently contains another potentialADHD treatment, NWP09. The compound, indicated for ADHD, is a Methylphenidateextended-release chewable tablet, and is currently in Phase IIIdevelopment. NWP09 is undergoing a PhaseIII multicenter, double-blind, randomized, placebo-controlled clinical trialfor the evaluation of its effectiveness in children with ADHD ages six years to12 years. The company has a target date of 2013 for a New Drug Approvalsubmission.
"This agreement demonstrates our focused expansion of theEstablished Products U.S. brands business to offer a diverse portfolio ofhigh-quality medicines that meet patients' needs," said Albert Bourla,president and general manager in Pfizer's Established Products business unit,in a statement. "By combining the advantages of Quillivant XR with Pfizer'scommercialization expertise, we will be able to provide ADHD patients and theircaregivers a new treatment option."
ADHD currently stands as one of the most common neurobehavioraldisorders in the United States, and is characterized by marked difficultypaying attention, impulsive behavior and, in some cases, being overly active.In a 2009 report from the Centers of Disease Control and Prevention,approximately one in 10 children (9.5 percent) ages 4 to 17 in the UnitedStates have received a diagnosis of ADHD. The condition often continues intoadulthood, and roughly 4 percent of Americans are believed to be affected withadult ADHD.
In a report released by GlobalData in October 2011,"Attention Deficit Hyperactivity Disorder (ADHD) Therapeutic: PipelineAssessment and Market Forecasts to 2018," the firm noted that the global ADHDtherapeutics market had a value of approximately $3.8 billion in 2010, and isexpected to grow at a compound annual growth rate of 8 percent over the nexteight years, reaching roughly $7.1 billion by 2018.
The transaction is expected to close in the fourth quarterof this year, and is subject to customary closing conditions, includingregulatory approval in the United States. No details were provided as toPfizer's plans for NextWave's facilities or employees following theacquisition.
Pfizer brought on Jefferies & Company Inc. as its financial advisorfor the transaction, and Pfizer Legal Alliance firms Kaye Scholer LLP and Ropes& Gray LLP were brought on as legal counsel. NextWave brought on AquiloPartners LP as its financial advisor, while Cooley LLP served as the company'slegal advisor.
