Aliso Viejo-based Avanir Pharmaceuticals Inc. last week reached out to one member of Big Pharma to diversify and another to settle a legal dispute.
The company signed a deal with Whitehouse Station, N.J.-based Merck & Co. to co-promote Merck’s JANUVIA, JANUMET and JANUMET XR diabetes drugs to nursing homes and other long-term care facilities. The deal runs for three years and starts Oct. 1.
Up to $60M
The drug maker said in a Securities and Exchange Commission filing that it could get up to $60 million from Merck over the contract’s life. Avanir will get a fixed monthly fee, as well as performance payments from Merck.
Working with Merck “will further advance” Avanir’s goals and drive its commercial operations forward, said Rohan Palekar, Avanir’s chief commercial officer.
“Our sales force is well established within the institutional setting and should be able to expand [use] of Merck’s diabetes therapies based on their deep understanding of the treatment needs of these physician and patient populations,” Palekar added.
Merck, which has annual sales of $47 billion and a recent market value of $144 billion, said it would continue promoting JANUVIA, JANUMET and JANUMET XR in all other settings, as well as handle other aspects of research, manufacturing and marketing.
JANUVIA and JANUMET, which are used to treat type 2 diabetes, accounted for $4.09 billion and $1.66 billion in revenue for Merck, respectively, in 2012.
Avanir’s primary drug, NUEDEXTA, is sold to treat pseudobulbar affect, a condition that results in involuntary emotional outbursts, such as laughing or crying.
Investors liked the Merck deal, sending Avanir’s shares up 11% in after-hours trading on Aug. 12, the day the deal was announced. Its shares have risen 79% since the start of the year, with a recent market value of $727 million.
“The biggest point from the deal, in our view, is validation of the prowess in long-term care that Avanir has built up through marketing Nuedexta,” wrote Charles Duncan and Roy Buchanan, analysts with Minneapolis-based investment bank Piper Jaffray, in a note on the deal.
Avanir said last week that it settled a pending patent lawsuit with New Jersey-based Sandoz Inc. over an abbreviated new-drug application to sell a generic version of Nuedexta. Sandoz will be allowed at the end of July 2026 to sell a generic version of Nuedexta, which had $19 million in sales during the three months ended in June, “or earlier under certain circumstances,” Avanir said in a news release announcing the deal.
