Biotech Values

[DewDiligence]

EGRX +20% (all-time high) on settlement/license with Teva re rapid-acting liquid formulation of Treanda for US market:

http://finance.yahoo.com/news/teva-eagle-pharmaceuticals-announce-teva-120000150.html

Teva Pharmaceutical Industries Ltd. and Eagle Pharmaceuticals, Inc. today announce that the companies have entered into an exclusive license agreement for EP-3102, Eagle’s bendamustine hydrochloride (HCl) rapid infusion product for the treatment of chronic lymphocytic leukemia (CLL) and indolent B-cell non-Hodgkin lymphoma (NHL).

Teva will be responsible for all U.S. commercial activities for the product including promotion and distribution. Eagle has responsibility for obtaining all regulatory approvals, conducting post-approval clinical studies, if required, and initially supplying drug product to Teva.

Eagle has submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for the rapid infusion bendamustine product for the treatment of patients with CLL and patients with indolent B-cell NHL that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. Eagle has requested Priority Review of the NDA; this product candidate has received Orphan Drug Designations for both CLL and indolent B-cell NHL, and therefore may be eligible for seven years of exclusivity upon approval. The NDA is supported by data from Eagle’s recently-completed clinical trials demonstrating that the rapid infusion bendamustine HCl product can be administered in ten minutes in a low-volume, 50 mL admixture.

…As part of the agreement, Teva will waive its orphan drug exclusivities for NHL and CLL with respect to EP-3102, which should allow the product to come to market more quickly. Under the terms of the exclusive license agreement, Eagle will receive an upfront cash payment of $30 million and is eligible to receive up to $90 million in additional milestone payments. In addition, Eagle will receive double-digit royalties on net sales of the product, assuming FDA approval.

This removes a major overhang from EGRX insofar as Teva had maintained that its own orphan-drug exclusivity on Treanda blocked EGRX’s product from being launched; moreover, the two companies were embroiled in Treanda patent litigation, which has now been settled.

According to today’s CC, the $90M in potential milestone payments relate to three goals: i) timely FDA approval of EGRX’s 505b2 NDA; ii) attaining undisclosed sales thresholds; and iii) reimbursement positioning of the product.

Although other companies’ generic versions of lyophilized Treanda could come to market as soon as 2016 (when the H-W 30-month stay expires), Teva’s Orange Book patents against those challengers could hold up; in any case, EGRX believes that its rapid-infusion ready-liquid formulation can win out against any generic competition (and Teva evidently agrees).

EGRX is now +69% from its IPO price of $15 exactly one year ago. I own the stock in the SI charity contest.