AVANIR Receives $3.6 Million on Docosanol Patent Extension
Patent Extension Triggers Payment Due Under Revenue Monetization Transaction
SAN DIEGO, May 1 /PRNewswire-FirstCall/ -- AVANIR Pharmaceuticals (Amex: AVN) announced today that the U.S. Patent and Trademark Office extended the term of AVANIR's key docosanol (Abreva(R)) patent by five years, triggering a payment of $3.6 million from Drug Royalty USA. Drug Royalty USA purchased a portion of the future royalty stream on North American sales of Abreva from AVANIR for $24.1 million with an initial payment of $20.5 million received on December 24, 2002. The additional years of patent protection granted AVANIR was the maximum extension allowed, increasing the life of the patent to 2014.
"We are pleased to receive this additional payment and the patent extension, which substantially extends the time AVANIR can expect to receive royalties on sales of Abreva and increases the value of our original license agreement with GlaxoSmithKline," said AVANIR President and Chief Executive Officer Gerald J. Yakatan, Ph.D. "We intend to extend our docosanol franchise throughout the world and expect to hear from the Medical Products Agency (MPA) in Sweden regarding potential approval within the current quarter. Marketing approval in Sweden would be our first step in the mutual recognition process to obtain regulatory approval throughout the European Union."
AVANIR sold a portion of its future royalty stream on North American sales of Abreva to Drug Royalty USA for $24.1 million. Under the terms of the license purchase agreement with Drug Royalty, AVANIR retains rights to 50% of royalties earned on sales of Abreva in excess of $62 million a year in North America, and retains the rights to all current and future royalties from product sales in the rest of the world. AVANIR also retains the rights to other potential product indications, such as genital herpes and herpes zoster.
"Monetizing a portion of the Abreva royalty stream enabled AVANIR to leverage a current asset to fund the development of a potentially larger asset, our Neurodex product platform, currently in its final Phase III clinical trial," said Gregory P. Hanson, Vice President and Chief Financial Officer at AVANIR Pharmaceuticals. "The revenue monetization allows AVANIR to secure in present day dollars the anticipated value of future royalties over the life of the royalty agreement with GlaxoSmithKline, and helps insulate us from the competitive risk of a new product entering the cold sore market."
Abreva(R) is the largest selling consumer healthcare product in the United States for the treatment of cold sores. It is the only product approved by the U.S. Food and Drug Administration (FDA) in its category for sale in the over-the-counter market. AVANIR licensed the product to GlaxoSmithKline in April 2000. The drug was approved by the FDA in July 2000 and ranked in the top ten of all new consumer healthcare products introduced in the twelve-month period ended June 2001, according to AC Nielson data.
Since licensing Abreva, AVANIR has received over $55 million from milestones, fees, royalties and the sale of rights to future royalties from Abreva. AVANIR has extended its docosanol franchise by licensing docosanol to companies intending to market the product in certain countries in Europe, Asia and the Middle-East. Regulatory approval to manufacture and sell the product has been obtained in the U.S., Canada, Israel, South Korea and is pending in Sweden.
About the Company
AVANIR Pharmaceuticals, based in San Diego, is a drug discovery and development company with a commercialized FDA-approved product (Abreva(R)) and products in clinical development for the treatment of pseudobulbar affect (Phase III), neuropathic pain (Phase II), and allergy and asthma (Phase I). AVANIR is engaged in small molecule research to develop treatments for central nervous system disorders and inflammatory diseases. Through the use of its Xenerex(TM) technology, AVANIR also develops human monoclonal antibodies for infectious diseases and other therapeutic applications. Further information about AVANIR can be found at www.avanir.com .
The information contained in this press release, including any forward- looking statements contained herein, should be reviewed in conjunction with the company's Annual Report on Form 10-K and other publicly available information regarding the company. Copies of such information are available from the company upon request. Such publicly available information sets forth many risks and uncertainties related to the company's business and technology. Forward-looking statements often contain such words like "estimate," "anticipate," "believe," "plan," "intend" or "expect". Preliminary research findings are not always supportable by the scale-up of commercial operations, and many known and unknown risks and uncertainties could cause actual results to differ materially from those indicated in these forward-looking statements. The company can give no assurance that the New Drug Submission will be approved by the Swedish Medical Products Agency on a timely basis or at all. Further, market acceptance for docosanol 10% cream and other drug products is unpredictable and substantially outside of the influence and/or control of the company.
SOURCE AVANIR Pharmaceuticals
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