Xenoport (f/k/a XNPT)

[surf1944]

UPDATE 1-XenoPort says Glaxo breached Horizant contract

Wed Jan 25, 2012 7:10am EST

* Says GSK failed to maximise horizant sales

* Says it can call off deal if GSK continues to default

Jan 25 (Reuters) - XenoPort Inc said its partner GlaxoSmithKline Plc has breached a contractual obligation to maximise the sales of their drug to treat restless legs syndrome (RLS) and achieve a sales milestone.

Last year, the U.S. Food and Drug Administration approved Horizant, which was co-developed by XenoPort and GSK, to treat RLS -- a neurological disorder characterized by an urge to move the legs, usually caused or accompanied by uncomfortable sensations in the legs.

Under the agreement, GSK has commercial rights to the drug in the United States with XenoPort getting a profit share of 20-50 percent for the first two years.

XenoPort was eligible to receive $312.5 million in milestone payments. It is yet to receive up to $290.0 million upon the achievement of specified sales levels.

On Wednesday XenoPort sent a notice alleging GSK materially breached its contractual obligation, it said in a regulatory filing.

XenoPort said it can terminate the agreement if GSK continues to default its contractual obligation for 90 days after the receipt of the written notice of the breach, which will expire on April 24.

Shares of XenoPort closed at $4.35 on Tuesday on the Nasdaq.