Lundbeck makes $200M down payment in blockbuster CNS drug pact with Otsuka

Danish drugmaker Lundbeck and Japanese drug giant Otsuka have joined forces for a pact that makes the two companies major partners in the global market for drugs against diseases of the central nervous system. Both companies now have a lot riding on developmental CNS drugs in the deal as each company's best-selling drugs face generic competition in the coming years.

The top drug in the new pact, which covers up to five compounds, is Otsuka's long-lasting version of the blockbuster anti-psychotic drug Abilify. The once-monthly Abilify (dubbed aripiprazole depot formulation) is in late-stage development for schizophrenia. Otsuka, Japan's second-largest drugmaker, has also made part of the pact its candidate OPC-34712, which is in Phase III development for schizophrenia and as an adjunct for treating major depression. Lundbeck is contributing three earlier-stage candidates to the collaboration. Lundbeck has agreed to pay Otsuka $200 million upfront and up to $1.4 billion in development and regulatory fees in the deal.

Lundbeck is obviously footing most of the bill for the collaboration with Otsuka, and for good reason. Exclusivity on the company's lead drug, the antidepressant Lexapro (partnered with Forest Labs), expires in March, opening the gates for generics that are expected to take over part of the market for the drug with their knockoff versions. If the long-lasting Abilify comes through trials and regulatory reviews as hoped, Lundbeck stands to get half of the sales of the new treatment in Europe and Canada as well as a fifth of the sales in the U.S. Lundbeck aims to bring in total sales of up to $9.1 billion from drugs involved in the deal, Reuters reported.

"We are very excited that Otsuka and Lundbeck have entered into a co-development and co-commercialization agreement for aripiprazole depot formulation and OPC-34712, both potential key drivers of future growth for Otsuka's CNS business," Dr. Taro Iwamoto, Otsuka Pharmaceutical's president and representative director, said in a statement. "Lundbeck's expertise in developing depression and anxiety treatments and Otsuka's expertise in developing anti-psychotics will maximize the medical and commercial value of Otsuka's portfolio in CNS."

"With the addition of aripiprazole depot formulation and OPC-34712, Lundbeck has significantly broadened its growing psychiatry portfolio with an exciting and unique potential treatment in an area of high unmet need," Lundbeck CEO Ulf Wiinberg said in statement. "This collaboration allows us to be introduced to the U.S. psychiatry community as soon as 2013."

- here's the release
- see the Reuters article
- and WSJ's coverage

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