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| IBSchek detects antibodies (blue) for cytolethal distending toxin B, which also trigger autoimmune attacks on normal gut protein, leading to irritable bowel syndrome.--Courtesy of Commonwealth Labs |
Serial acquirer Valeant ($VRX) made another deal. Though not on the scale of its other purchases, the addition of Commonwealth Laboratories' blood test for irritable bowel syndrome in the U.S. and Canada will help the Big Pharma's drug compete with rival Allergan ($AGN) in that therapeutic arena. The cost of the impending transaction was not disclosed, but it includes sales-based milestone payments in addition to upfront payment.
Commonwealth's IBSchek diagnostic is an enzyme-linked immunosorbent assay (or ELISA) that's conducted via a standard blood draw in a doctor's office.
The analysis is performed within 24 hours of the specimen's arrival at Commonwealth's CLIA laboratory, the company says.
On a company video, Commonwealth says the disease is triggered by acute gastroenteritis (stomach flu), which triggers a cascade affect that results in the creation of a toxin called cytolethal distending toxin B. Antibodies to CtdB proliferate, but also mistakenly attack the normal gut protein, vinculin. The autoimmune attack affects the function of the gut, and the subsequent buildup of bacteria leads to IBS.
Commonwealth's diagnostic detects the antibodies to CtdB and vinculin. The company IBSchek can distinguish between IBS and other causes of diarrhea like celiac disease and inflammatory bowel disease.
Valeant added IBS drug Xifaxan to its stable with its $11 billion purchase of Salix in April. Salix once estimated that an IBS approval could add $1.6 billion in sales for the drug, but it faces competition from Allergan's (formerly Actavis') Viberzi.
Both drugs were approved by the FDA on the same day in May. Valeant no doubt thinks the purchase of Commonwealth's diagnostic can help Xifaxan differentiate itself from Allergan's med. The market consists of 45 million Americans and Canadians, says Commonwealth, adding that IBS affects about 15% of the world's population.
In addition, Valeant will acquire breath tests for lactose, fructose and sucrose intolerance, small intestinal bacterial overgrowth, and the bacterium Helicobacter pylori, as well as a stool test for C. difficile. But the Big Pharma will only own the rights to the diagnostics in the U.S. and Canada.
Commonwealth's current owners will form an unaffiliated company called Commonwealth Diagnostics International to sell its diagnostics offerings outside the U.S. and Canada.
"This partnership allows Commonwealth to effectively scale our product line, including our ground-breaking new blood test for irritable bowel syndrome, IBSchek, utilizing Valeant's vast resources and industry experience," Commonwealth COO Craig Strasnick, in a statement. "We truly believe this move will be a driving force in helping the millions of Americans and Canadians affected by irritable bowel syndrome and other disorders within gastrointestinal, as well as additional medical disciplines, as we continue to expand upon our portfolio."
- read the release