Sciele claims Victory in pain battle with $150 million acquisition

Atlanta-based Sciele Pharma acquires Victory, aligns with Shionogi’s pain management focus

Lori Lesko
ATLANTA—In a move orchestrated to diversify and take a bite out of the profitable U.S. pain management market, Atlanta-based Sciele Pharma Inc., a subsidiary of Shionogi & Co. of Osaka, Japan, has acquired Victory Pharma Inc., a U.S. specialty pharmaceutical company based in San Diego. Victory's lead product is Naprelan, a non-steroidal anti-inflammatory drug (NSAID).

Under the terms of the agreement announced May 18, Sciele will pay $150 million at closing expected to take place in the second quarter of 2009. The deal is subject to clearance under the Hart-Scott-Rodino Antitrust Improvement Act and other customary closing conditions.

Victory markets Naprelan (naproxen sodium), a trademark of Elan Corp., controlled-release tablets and other pain products to pain management specialists, rheumatologists, orthopedic surgeons and selected primary care physicians through its physician office-based field sales force.

Matthew Heck, Victory Pharma president and CEO, declined to comment on this story due to confidentiality issues. However, Heck stated in a press release, "Naprelan exhibits a good gastrointestinal safety profile, and with the well-publicized cardiovascular toxicity concerns regarding COX-2 inhibitors, the treatment paradigm is shifting back to traditional NSAID therapies in the U.S. and other countries. Naprelan is well-positioned for this shift, and the franchise appears to have additional growth potential."

Founded in 2004, Victory Pharma, is a privately held specialty pharmaceutical company focused on acquiring, developing and marketing products to treat pain and related conditions.

"Over the past several years, we have been pleased with our progress at Victory," Heck stated. "We have built an outstanding pain franchise and believe that Sciele has the resources to maximize the potential of Victory's marketed products and its research and development pipeline.

Joseph T. Schepers, Sciele Pharma's director of investor relations, explained the company's decision to approach and acquire Victory in this way: "In business and development, we are always looking for new opportunities to grow and diversify. Sciele has focused on the therapeutic areas of cardiovascular, diabetes, women's health and pediatrics. And Victory's expertise in pain medication is part of Sciele's diversification strategy."

Sciele Pharma's Web site states the company "is committed to continue its growth through business development initiatives—primarily licensing and acquiring products and/or companies. Licensing and acquiring late stage and commercialized products for sale in the United States are key to our near- and long-term success."

To date, Sciele has in-licensed or acquired products from companies including AstraZeneca, Bayer AG, Warner-Lambert, sanofi-aventis, Wyeth, Elan, SkyePharma, Andrx, Pohl-Boskamp, Biovail, Galephar, Addrenex, Summers Labs, Plethora Solutions, LifeCycle Pharma and Novo Nordisk.

Sciele's cardiovascular and diabetes products treat patients with high cholesterol, hypertension, high triglycerides, unstable angina and type 2 diabetes; and its pediatrics products treat allergies, asthma and attention deficit and hyperactivity disorder (ADHD).
Victory listed its net sales in 2008 at $57 million, and Sciele has the resources to further accelerate the growth of the newly acquired products, Schepers said. With 720 Victory employees in the sales force all over the U.S., Sciele will market its newly acquired products only in America.

Ed Schutter, Sciele's president and CEO, said in a company press release, "The acquisition of Victory is another important step in the implementation of Sciele's strategic plan to further diversify our product portfolio and generate additional growth for Sciele. This acquisition provides an immediate expansion into the pain market for Sciele, establishes a platform from which to acquire additional pain management products and aligns Sciele with Shionogi's focus in pain management."

The pain market has been one of Shionogi's target therapeutic areas. Shionogi will further accelerate the development of its drug candidate for the alleviation of opioid-induced adverse effects and other preclinical compounds.

Founded in 1992, Sciele employs more than 1,000 people. On Oct. 9, 2008, Shionogi and Sciele jointly announced the completion of Shionogi's acquisition of Sciele. Shionogi completed the acquisition through a cash tender offer followed by short-form merger. Sciele is now an indirect, wholly owned subsidiary of Shionogi.
 
Shionogi, considered a major research-driven pharmaceutical company, has provided such innovative medicines as Crestor and Doripenem, and is engaged in some new research areas such as allergy and cancer.

The Japanese pharma announced its corporate reorganization business plan on Feb. 2, targeted toward speeding up and globalizing R&D activities, strengthening its domestic sales framework and establishing a high-quality, cost-effective production system. The plan became effective April 1.
 

Lori Lesko

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