Kythera buys back Bayer's stake in PhIII chin-fat therapy in $84M deal

It turns out that Bayer doesn't want to be in the chin-fat busting business after all. Bayer's consumer care arm handed back its ex-U.S. rights in Kythera Biopharmaceuticals' lead treatment ATX-101, aimed at eliminating the double chin. And in return Bayer gets a $33 million chunk of Kythera's stock, a $51 million note payable by 2024 and some potential longterm sales milestones.

The pact leaves Calabasas, CA-based Kythera ($KYTH) in control of a cosmetic therapy that is nearing an FDA submission, planned for the next quarter, as well as a series of applications outside the U.S. And Kythera comes out of their four-year deal on the plus side, with Bayer writing off its $43 million upfront paid back in 2010 and any of the $330 million in biobucks pledged to milestones that it shelled out in recent years.

Last fall Kythera reported that a pair of Phase III studies of ATX-101 hit their primary endpoints. The drug is a synthetic version of deoxycholic acid, a molecule in the body that breaks down dietary fat.

Leerink's Seamus Fernandez says the deal is a positive for Kythera, which he believes is on the verge of getting a green light to start selling the fat-buster.

"The recovery of global rights gives KYTH control of 100% of the global opportunity, where we assume int'l sales can peak at >$300M," Fernandez says in a note to investors today. "Bayer's statement that the transaction reflects a change in strategic focus is consistent with feedback from industry contacts. KYTH also noted that its input into any reassignment of rights provided it with an advantage in this transaction."

"I am confident in our ability to maximize the long-term global value of ATX-101," says Kythera CEO Keith Leonard in a statement. "While our primary focus remains filing our U.S. New Drug Application in the second quarter of 2014, we also plan to make multiple ex-U.S. regulatory submissions in the next 12 months."

- here's the press release

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