Depomed pays $47.5m for migraine drug Cambia in US
This article was originally published in Scrip
That didn't take long: Depomed made good on its promise in October to use cash from the sale of its diabetes drug royalties to buy pain and neurology-focused assets. The company will pay Nautilus Neurosciences up to $52.5m for US rights to the migraine drug Cambia.
Newark, California-based Depomed paid $47.5m up front for Cambia (diclofenac potassium for oral solution), the only non-steroidal anti-inflammatory drug (NSAID) approved to treat migraine without being co-formulated with a triptan. The company will boost Cambia revenue with its much larger sales force and an immediate 26% price increase.
"Part of our declared strategy is to focus on drugs that are marketed to pain specialists and neurologists," Depomed president and CEO Jim Schoeneck told Scrip.
The company looks for approved or marketed therapies as well as Phase III assets that are ready for registration.
Mr Schoeneck said Cambia has a unique niche in the migraine market as a powder that's dissolved in liquid to provide rapid onset of pain relief. It can be prescribed before triptans, for patients who've failed treatment with triptans, or in combination with the popular class of migraine drugs to boost the efficacy of triptans.
Cambia also was attractive to Depomed, because Nautilus negotiated settlements with generic drug makers that provide patent protection until January 2023 and because the oral solution fits into the current bag of medicines marketed by Depomed's sales force.
The company markets Gralise (gabapentin) for post-herpetic neuralgia, Zipsor (diclofenac potassium liquid capsules) for mild-to-moderate acute pain and Lazanda (fentanyl nasal spray) for breakthrough cancer pain. The three drugs generated $16.3m in third quarter 2013 sales.
Depomed said 70% of current Cambia prescriptions are written by neurologists, half of whom already write prescriptions for Gralise. Nautilus had $18m in Cambia sales on an annualized basis for the past three months, representing a 30% year-over-year increase.
"They have done a nice job of growing the drug with a very limited amount of promotion," Mr Schoeneck said.
Nautilus had 35 sales representatives promoting Cambia, but Depomed will market the migraine drug with its 155-person sales team. The company's immediate 26% price increase will bring Cambia in line with other drugs for acute migraine pain, Mr Schoeneck said.
Under the terms of its deal with Nautilus, Depomed will pay the private company's investors up to $5m in additional fees based on sales milestones. Depomed also will take over royalty payments and up to $10m in milestone fees due to Nautilus's partners.
Cambia was developed by APR Applied Pharma Research, which licensed the drug to Novartis outside of the US and Canada. APR licensed US and Canadian rights to ProEthic Pharmaceuticals, which was acquired by Kowa Pharmaceuticals.
Nautilus licensed the US and Canadian rights from Kowa after Cambia was approved in 2009 (scripintelligence.com, 24 June 2009). Tribute Pharmaceuticals licensed Canadian rights from Nautilus before it was acquired by Stellar Pharmaceuticals.
Depomed will continue its own buying spree using what remains of the company's $83.4m in cash as of 30 September and the proceeds from the $240.5m sale of Glumetza, Janumet, Invokana and extended-release metformin royalties to PDL BioPharma (scripintelligence.com, 22 October 2013).
Mr Schoeneck said Depomed always is on the lookout for potential product acquisitions, but the company does not expect to close any additional transactions before the end of 2013.