Atlanta specialty pharma company Arbor Pharmaceuticals has bagged under pressure from Californian biotech XenoPort ($XNPT) for $467 million.
The deal--for $7.03 per share in cash--is a 60% premium to the closing price of XenoPort shares on May 20. It will see Arbor gain access to Horizant, a drug marketed for restless legs syndrome and undergoing a trial as a potential treatment for patients with alcohol abuse disorder.
XenoPort has been in trouble for a while and at start of the year, reports suggested that it was looking to sell itself. This came after a string of R&D disappointments which saw its share price tank.
Things went awry for XenoPort last year when XP23829, an oral psoriasis drug, came through with mixed results in a Phase II study. The company at first declared the trial a success and outlined plans for a late-stage effort--but later relented and cut the program altogether.
In October, the biotech laid off 25 workers by late December--and CEO Ronald Barrett, who helped start the company in 2009, retired at the same time.
Since then, XenoPort has said it wants to get out of the business of R&D, seeking partners for the mid-stage Parkinson's disease treatment XP21279.
XenoPort has a single approved asset, the restless legs syndrome treatment Horizant, and has put all of its efforts behind that. The drug, approved in 2012, has long been a sales disappointment, and GlaxoSmithKline ($GSK) abandoned its stake in Horizant shortly after launch.
There was a small bright spot last month however when the biotech signed a $490 million drug licensing deal with India’s Dr Reddy’s ($RDY) that sees the Hyderabad-based drugmaker granted exclusive U.S. rights for the development and commercialization of XenoPort's oral new chemical entity, XP23829.
Dr Reddy’s said it now plans to develop XP23829 as a potential treatment for moderate-to-severe chronic plaque psoriasis--and may also develop XP23829 for relapsing forms of multiple sclerosis, as it has a similar mechanism of action as Biogen's ($BIIB) marketed MS drug Tecfidera.
It also recently granted exclusive worldwide rights for the development and commercialization of its clinical-stage oral product candidate, arbaclofen placarbil, to Indivior PLC for all indications.
But this leaves Arbor with little to mine in terms of pipeline, with the focus squarely on Horizant and potentially new indications for the drug in the future. Ed Schutter, president and CEO of Arbor, said: “We are pleased to be adding Horizant and the XenoPort pipeline to the growing portfolio of Arbor products.
“We believe that XenoPort’s lead product offers patients and physicians a valuable treatment option for moderate-to-severe primary restless legs syndrome and postherpetic neuralgia. The XenoPort sales team has done an excellent job of growing Horizant, and we look forward to supporting them to continue this significant momentum.”
Vincent Angotti, CEO of XenoPort, added: “This transaction provides immediate and substantial value to our stockholders, and we believe that Arbor is well positioned to provide the proper resources for a more expanded commercialization effort of Horizant. We evaluated many potential options to maximize the value for stockholders and believe this transaction represents a great outcome for XenoPort stockholders.”
- check out the release
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Under pressure, XenoPort sells U.S. rights of failed psoriasis pill to Dr. Reddy's