The Medicines Co Sells CV Products To Fund Pipeline
Executive Summary
The Medicines Co. is selling off three cardiovascular products to Italy's Chiesi Farmaceutici SPA in an effort to raise funds to pay for R&D as top-seller Angiomax continues to decline.
The company announced May 9 that Chiesi will pay a total of $792m for three already-marketed drugs, including the newly-approved Kengreal (cangrelor). The other drugs included in the deal are the antihypertensive Cleviprex (clevidipine) and the rights to the injectable direct thrombin inhibitor Argatroban.
"Today's announcement is strong evidence of our commitment to delivering on our strategic goals, and the transaction itself is a major step in the execution of that strategic plan. We see this transaction as a spring board for further progress and growth. And as we increasingly focus on our highest value R&D assets, we anticipate delivering exciting news throughout the remainder of 2016," said TMC CEO Clive Meanwell on a May 9 call with analysts, noting the sale is in-line with the restructuring plan the company announced last November.
The deal with Chiesi Comes at a good time for TMC. The Italian drugmaker will pay $260m upfront, as well as $480m in sales-based milestones. Chiesi will also assume the payment of $50m in milestone payment obligations and $2m for product inventory. The deal is expected to close in the third quarter.
TMC's best-selling product Angiomax (bivalirudin) lost patent protection in July 2015, opening it up to generic competition. Due to the influx of low-cost generics, the drug only brought in $16.9m in sales during the first quarter, down from $100.7m in the year-earlier period. More than half of TMC's revenue stream has been lost through the patent expiry.
The company believes the sale of these "non-core" assets will allow it to control costs and fund pipeline development. TMC said the divestiture will allow it to save between $65m to $80m in R&D costs and SG&A expenses.
The antiplatelet Kengreal was approved last June by FDA as an adjunct to percutaneous coronary intervention (PCI) to reduce the risk of myocardial infarction, repeat coronary revascularization and stent thrombosis, but only in patients that had not been treated with a P2Y12 platelet inhibitor and are not being given a glycoprotein IIb/IIIa inhibitor (GPI).
The drug faced a hard road to approval, going in front of two advisory committees. After an advisory committee raised questions about the potential for bleeding risks, FDA approved Kengreal with a label for a limited patient population instead of the broader population The Medicines Co. was hoping to reach.
TMC said in early-2015 that it would be adding 400 reps to its sales force in an effort to properly launch Kengreal and further promote its other cardiovascular products, including Cleviprex. Things haven't gone as planned – this drug made up less than 30% of the company's 2015 revenues (although TMC did not break out sales).
The divestiture to Chiesi comes just a few months after the December divestiture of three hemostasis products to Mallinckrodt PLC, including Recothrom, a recombinant topical thrombin; PreveLeak, a flexible surgical sealant; and Raplixa, a powder fibrin sealant made from human plasma-derived fibrinogen and thrombin. Mallinckrodt paid $175m upfront and agreed to $235m in milestone payments [See Deal].
The payments from Mallinckrodt and Chiesi will help fund TMC's pipeline, including its PCSK9 inhibitor, which recently started Phase II. Results from the trial are expected before the end of the year and the company expects to start a second Phase II trial. TMC also has three other products in its pipeline that it believes could be blockbusters if they are successful.
"I think our best opportunities are within our own pipeline and portfolio. We are extremely focused on PCSK9 synthesis inhibitor, which we think has the potential to be a game-changing blockbuster in the dyslipidemia space. We're very excited about the progress of ApoA-1 MILANO or MDCO-216. The beginning of the work in Phase II for ABP-700 is really going quickly and aggressively. And then, finally, of course, the Carbavance data review for Phase 3 will be coming up quite soon," said Meanwell.
"So, I think those four blockbuster R&D projects give us some very exciting shots on goal, and that is where we should be putting our money right now. As to longer-term views of business development and in-licensing, I think that's something we'll review through the year. But right now, we're very focused on capital deployment against these existing assets," he added.