Valeant Pharmaceuticals (VRX) is taking steps to free itself from financial obligations as it prepares to move forward with the development of its dermatology pipeline. The drugmaker said today that it has paid $115 million for the income rights for licensed and pipeline products of Dow Pharmaceutical Sciences, which it acquired for $285 million in 2008. Income rights for Dow's pipeline were not a part of that deal.
This buyout frees Valeant from up to $235 million in milestone obligations to Dow's former shareholders for the development and commercialization of the acne treatments. Dow's pipeline included compounds in development for the treatment of rosacea, moderate to severe acne, fungal infections and common warts. Valeant said in 2008 that it expected to launch one two products from the pipeline in 2012.
"In the short-term, we immediately offset the erosion from our ribavirin royalties and in the longer-term, we could avoid considerable future milestone obligations that would be incurred if we successfully commercialize our dermatology compounds acquired from Dow," J. Michael Pearson, chairman and CEO said in a statement. "After reviewing phase II results on three of our dermatology compounds and meeting with the FDA this past summer, we believe these compounds have strong potential for future success. We can now turn our efforts to moving these compounds into phase III studies and continuing to focus on building a strong dermatology franchise."
- here's the Valeant release
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