AVANIR Pharmaceuticals Completes Sale Of FazaClo
Received Upfront Payment of $43.9 Million; Eligible for Total Payments of up to $54 Million
AVANIR Pharmaceuticals (NASDAQ:AVNR) today announced that it has completed the sale of currently marketed, antipsychotic drug FazaClo® (clozapine, USP) to Azur Pharma, a specialty pharmaceutical company headquartered in Ireland. Upon close of the transaction AVANIR received an upfront payment of $42 million, plus an additional $1.9 million in working capital adjustments. Under the terms of the agreement, previously announced on July 3, 2007, AVANIR could receive up to an additional $10 million in payments in 2009 contingent upon certain regulatory conditions, and up to $2 million in royalties, based on 3% of annualized net product revenues in excess of $17 million.
AVANIR has allocated $11 million in payments to pay down a portion of its outstanding debt, which will be reflected on the Company's balance sheet for the year ending September 30, 2007. The Company believes that the net payments from the sale of FazaClo, plus the cash, cash equivalents and unrestricted investments in securities at June 30, 2007 will be sufficient to finance operating expenses through the end of the next fiscal year, including the initiation of the planned confirmatory Phase III clinical trial of Zenvia™ in patients with involuntary emotional expression disorder (IEED), otherwise known as pseudobulbar affect (PBA).
"The rapid close of this transaction is a testament to our team's ability to execute on our strategic objective of becoming a late-stage, clinical development company dedicated to improving treatments for central nervous system conditions," said Keith Katkin, AVANIR's President and CEO. "We remain focused on the clinical development of our core asset, Zenvia, where we believe we can generate the most shareholder value."
Also under terms of the agreement, Azur Pharma has assumed AVANIR's future earn-out obligations to the prior owner of Alamo Pharmaceuticals payable upon the achievement of certain sales milestones after the closing of the transaction. AVANIR will finalize the transfer of FazaClo business operations to Azur Pharma in the coming months.
AVANIR Pharmaceuticals is focused on developing, acquiring and commercializing novel therapeutic products for the treatment of chronic diseases. AVANIR's products and product candidates address therapeutic markets that include the central nervous system (CNS), inflammation and infectious diseases. AVANIR's lead product candidate Zenvia is being developed for the treatment of IEED, also known as pseudobulbar affect (PBA), and is the subject of an approvable letter from the FDA for that indication. Additionally, AVANIR announced meeting all primary endpoints in a recently completed Phase III clinical trial with Zenvia in patients with diabetic peripheral neuropathic (DPN) pain. AVANIR has also licensed a compound to Novartis International Pharmaceutical Ltd. for the treatment of inflammatory disease. AVANIR's infectious disease drug candidate, AVP-21D9, is a human monoclonal antibody in pre-clinical development for the treatment of anthrax with funding to date from an NIH/NIAID grant. The Company's first commercialized product, Abreva®, is marketed in North America by GlaxoSmithKline Consumer Healthcare and is the leading over-the-counter product for the treatment of cold sores. Further information about AVANIR can be found at www.avanir.com.
Forward Looking Statements
Statements in this press release that are not historical facts, including statements that are preceded by, followed by, or that include such words as "estimate," "intend," "anticipate," "believe," "plan," "goal," "expect," or similar statements, are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by such statements. There can be no absolute assurance that the proceeds received by the Company from the sale of the Company's FazaClo operations, together with the Company's other available funds, will be sufficient to fund the Company's operations as currently anticipated, or that the Company will be able to commence and complete planned clinical trials within the projected time periods. Risks and uncertainties affecting the Company's financial condition and operations also include the risks set forth in AVANIR's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and from time-to-time in other publicly available information regarding the Company. Copies of this information are available from AVANIR upon request. AVANIR disclaims any intent to update these forward-looking statements.
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Reedland Capital Partners, an Institutional Division of Financial West Group, served as the financial advisor to AVANIR in the transaction.
|Aug 06, 2007|