Azur has snapped up FazaClo for $42m (€31m) plus contingent milestones, and is expecting the product - the only orally disintegrating form of clozapine for severely ill schizophrenic patients - to continue to perform well in the marketplace, with 2007 revenues estimated at over $25m.
FazaClo makes use of a patented drug delivery technology developed by CIMA Labs, which allows the mint-flavoured tablet to disintegrate in just 15 - 30 seconds and then be swallowed reflexively in saliva.
An extra bonus is the fact that only just over a month ago Avanir announced that the US Food and Drug Administration (FDA) had approved a new formulation of the drug, which Azur also gains as part of the purchase.
The new formulation provides bottle packaging (as opposed to the specialised blister packaging used previously) and a new 12.5mg dosage strength to add to the existing 25mg and 100mg strengths. Azur's initial activities will be focused on launching this new formulation later this year.
Azur gains the worldwide rights to FazaClo and assumes related assets such as sales, marketing and medical affairs. The company will pay $42m on close of the transaction (expected by the end of the month) and up to $10m in contingent payments during 2009.
Azur will also pay up to $2m in future royalties based on 3 per cent of annual net revenues for FazaClo in excess of $17m.
The sale of the successful antipsychotic was a much needed step for Avanir, who acquired the drug just over a year ago for $29m plus $4m in contingent run rate notes. The divestiture of the product is going towards funding the company's lead candidate Zenvia, for the treatment of involuntary emotional expression disorder (IEED) and diabetic peripheral neuropathic (DPN) pain.
The company has been scrambling of late to gather together the funds that will allow it to continue development of the product, only in May forced to announce restructuring plans following the end of two significant research collaborations.
The end of the agreements triggered efforts by Avanir to restructure and reduce operational costs to make up for the loss in revenue associated with the two deals, aiming to reduce annual operating expenses to $20m.
The company also then announced the possibility of selling off assets (including FazaClo among others) in a bid to solidify its financial position and ideally find enough cash to fund the majority of the company's operating expenses for the next two years - particularly in regard to confirmatory Phase III trials of Zentiva for IEED following an approvable letter from the FDA last year.
According to Avanir, the proceeds of the Azur deal will be sufficient to finance operating expenses for at least the next year, including the initiation of the Zentiva trials.
