QLT PhotoTherapeutics Inc -
QLT to sell Photofrin rights to Axcan
QLT PhotoTherapeutics Inc QLT
Shares issued 64,419,265 2000-04-28 close $82.2
Monday May 1 2000
Also Axcan Pharma Inc (AXP)
Dr. Julia Levy reports
QLT PhotoTherapeutics is proposing to sell its worldwide rights to Photofrin (porfimer sodium) to Axcan Pharma in a deal worth up to $60-million. QLT will be required to pay a portion of this consideration relating to the reacquisition of certain marketing and distribution rights.
Under terms of the deal, QLT will transfer to Axcan the worldwide development, manufacturing and marketing rights to Photofrin in exchange for an initial net cash payment of $2.5-million, a $4-million deferred payment, approximately 1.2 million common shares of Axcan and $13.5-million in preferred shares of Axcan which are redeemable within 12 months in cash or additional common shares of Axcan. In addition, QLT is entitled to future milestone payments of up to $20-million, payable in cash or preferred shares, based on future events.
"After an extensive strategic review of the Photofrin business, we believe that this proposed transaction with Axcan is the best alternative to meet our objectives and expand the potential for the product," said QLT president and chief executive officer, Dr. Julia Levy. "With a dedicated gastroenterology sales force in North America, Axcan is well positioned to support the existing business and capitalize on additional opportunities for Photofrin, especially in the treatment of Barrett's esophagus. QLT will continue to benefit from the future success of Photofrin through its equity investment in Axcan and expected future milestone payments.
"With the completion of the transaction, we will focus our resources on the successful launch and market expansion of Visudyne (verteporfin) and other products in our research and development pipeline."
Developed by QLT to treat cancerous and precancerous conditions, Photofrin was the world's first photodynamic therapy drug to receive approval. In 1994, Wyeth-Ayerst's Japan subsidiary became the exclusive marketing and distributing partner for Photofrin in Japan; in 1995, Ligand Pharamceuticals became the exclusive marketing and distribution partner for Photofrin in Canada; and in 1996, Sanofi-Synthelabo Inc. was granted exclusive marketing and distribution rights in the United States and the Caribbean. Concurrent with the proposed sale of Photofrin to Axcan, QLT has terminated the agreement with Ligand, has agreed to reacquire the rights from Sanofi-Synthelabo and has agreed to assign QLT's Japanese royalty rights under its agreement with Wyeth-Ayerst to Axcan.
At closing, Axcan will assume responsibility for the marketing efforts for Photofrin and future costs and obligations relating to the Photofrin business. Sanofi-Synthelabo will receive a portion of the consideration payable to QLT under the arrangement. Wyeth-Ayerst in Japan will continue to distribute Photofrin in this jurisdiction.
The transaction is subject to the receipt of certain regulatory and other approvals and is expected to close in the second quarter of 2000.
Photofrin is currently approved for marketing in the U.S., Canada, Japan and eight European countries including the United Kingdom. Applications remain pending in Italy, Ireland, Spain, Belgium, Greece, Austria, Norway, Sweden and Luxembourg.
The treatment is also being studied in a pivotal phase III trial at 35 centres throughout North America and Europe as a treatment for high-grade dysplasia associated with Barrett's esophagus, a precancerous condition resulting from prolonged acid reflux, commonly known as heartburn. Barrett's esophagus causes the lining of the esophagus to transform into tissue similar to that lining the stomach, making the tissue more susceptible to cancer. There are currently no satisfactory treatments approved for Barrett's esophagus.
WARNING: The company relies upon litigation protection for "forward-looking" statements.
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