Pharma major Dr Reddy’s Laboratories will buy exclusive intellectual property rights (IPR) of Australian drug discovery and development company Alchemia’s Fondaparinux sodium for $17.5 million.
Fondaparinux is a generic version of the anticoagulant drug Arixtra which is used for the treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE). It is also indicated for prevention of DVT after major surgery, such as knee and hip replacement worldwide.
“Under the binding terms of the sale, Alchemia will receive $17.5 million in cash from Dr Reddy’s upon the closing of the transaction. In addition to the agreed sale consideration, the company received a payment of $1.15 million for its share of net profit from the US – only sales of Fondaparinux for the quarter ending 30 June 2015,” Alchemia said in a statement.
In 2007, Alchemia granted Dr Reddy’s non-exclusive rights to manufacture fondaparinux sodium in active pharmaceutical ingredients form and exclusive rights to market fondaparinux in the North America.
In exchange for these manufacturing and marketing rights, Alchemia is entitled to receive 50% of the net profit generated from sales of fondaparinux in North America.
Dr Reddy’s is responsible for finishing of the product, all regulatory filings and market launch.
“Should the transaction be approved by shareholders and the transaction subsequently closed, the company will not be entitled to receive any further profit share revenues from Fondaparinux sales. The sale is conditional on shareholder approval, as the sale constitutes a disposal of the company’s main undertaking as per the ASX Listing Rules,” Alchemia said.
Alchemia’s generic fondaparinux was approved by the US Food and Drug Administration (USFDA) in July 2011 and launched by Dr Reddy’s in the US shortly after.
To date, the company has received a total of $21.4 million in revenues from its share of net profits for US sales of Fondaparinux. These revenues are net of (after) the company’s contribution of $5 million towards cost of goods improvements.
In 2012, the company granted Dr Reddy’s exclusive rights to market fondaparinux in all territories other than North America, in exchange for an agreed share of the net profits generated from sales in those territories In addition to the US, fondaparinux is currently being sold in Canada and India, however, sales of fondaparinux in these territories are yet to generate any profits.