Dr Reddy's Laboratories will pay an upfront fee of $50 million (Rs 335 crore) to XenoPort and up to $440 million (Rs 2,935 crore) on achievement of certain milestones.
Drug major Dr Reddy’s Laboratories has entered into a US licensing pact with XenoPort for the development and commercialisation of latter’s clinical-stage oral new chemical entity XP23829. Dr Reddy’s Laboratories will pay an upfront fee of $50 million (Rs 335 crore) to XenoPort and up to $440 million (Rs 2,935 crore) on achievement of certain milestones.
“Dr Reddy’s Laboratories and XenoPort, Inc have entered into a license agreement pursuant to which the company will be granted exclusive US rights for the development and commercialisation of XenoPort’s clinical-stage oral new chemical entity — XP23829,” the company said in a BSE filing today.
Dr Reddy’s Laboratories said it is planning to develop XP23829 as a potential treatment for moderate-to-severe chronic plaque psoriasis and may potentially develop XP23829 for relapsing forms of multiple sclerosis (MS).
Elaborating on the payment, it said, “Under the terms of the agreement, the company will receive exclusive US rights to develop and commercialise XP23829 for all indications. In exchange for these rights, XenoPort will receive a USD 47.5 million upfront payment and an additional USD 2.5 million for transfer of certain clinical trial materials to the company.”
“XenoPort will also be eligible to receive up to USD 190 million upon the achievement by the company of certain regulatory milestones which could be achieved over a period of several years. In addition, XenoPort will be eligible to receive up to USD 250 million upon the achievement of commercial milestones and up to mid-teens royalty payments based on potential net sales of XP23829 in the US,” the company added.
“XP23829 complements our internal development efforts, which have primarily focused on the mild-to-moderate psoriasis segment to date. In other markets, fumarates have been used as first-line choices of treatment prior to initiation of biologic therapies in patients with moderate-to-severe psoriasis.”
“We intend to initiate the registration programme for XP23829 as soon as feasible so that we can accelerate the availability of this important treatment choice for moderate-to-severe psoriasis patients in the US market,” Dr Reddy’s Laboratories Executive Vice President, Proprietary Products Group, Raghav Chari, said.
The agreement is subject to review by the US government under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, as amended, and will become effective only after clearing HSR review.
Dr Reddy’s Laboratories share price was trading at Rs 3,047 apiece, down 0.01 per cent in the morning trade on the BSE.