Pharmos Corporation Sells Ophthalmic Products to Bausch & Lomb
Proceeds to Fund Core CNS and Neuro-Inflammatory Business Could Reach $49 Million
ISELIN, N.J., Oct. 10 /PRNewswire/ -- Pharmos Corporation (Nasdaq: PARS and Nasdaq Europe: PHRM) today announced that Bausch & Lomb (NYSE: BOL - news) has purchased all rights to Pharmos' loteprednol etabonate (LE) ophthalmic business for cash and assumption of certain ongoing obligations. The acquisition has two parts, one for products already on the market, the second for a medication now in clinical trials. Based on meeting certain new product milestones, the price of the total acquisition may reach $49 million.
Proceeds from the sale will enable Pharmos to strengthen its product pipeline of therapeutics for central nervous system (CNS), neurological and inflammation-related indications, reinforcing a strategic decision by Pharmos to focus resources within this core area of expertise.
``The sale of the LE business is a logical outcome of our strategy to maximize the value of this asset in order to support our valuable CNS and neuro-inflammatory franchise,'' said Haim Aviv, Ph.D., Chairman & CEO of Pharmos. ``This transaction will enable Pharmos to sharpen its focus on existing product development activities and facilitate efforts to broaden our pipeline with new products and technologies.''
Transaction Terms and Use of Proceeds
Pharmos received approximately $25 million in cash for its rights to Lotemax® and Alrex®, prescription products that are made and marketed by Bausch & Lomb under a 1995 Marketing Agreement with Pharmos.
Bausch & Lomb also is acquiring future extensions of LE formulations including LE-T, a product currently in Phase III clinical trials, for approximately $14 million, with the actual payment price based on the date of market introduction of this new combination therapy. An additional milestone payment of up to $10 million could be paid to Pharmos to the extent sales of the new product exceed an agreed-upon forecast in the first two years.
Pharmos compensated the LE patent owner approximately $2.7 million from the proceeds of the sale of Lotemax and Alrex in return for his consent to Pharmos' assignment of its rights under the license agreement to Bausch & Lomb, and will also pay the patent owner a portion of the LE-T sale proceeds and a portion of its milestone payment.
The transaction provides Pharmos with significant capital to invest in its strategic growth as a leader in the sizeable marketplace for CNS, neurological and inflammation-based disorders. The Company plans to devote its resources toward three primary areas of activity: to support the successful completion of its current Phase III pivotal trial of dexanabinol for traumatic brain injury (TBI), to ramp-up efforts in advancing its other drug candidates from preclinical to clinical stages, and to support potential partnering arrangements, strategic collaborations, in-licensing and other tactical moves that could provide new drug candidates for clinical development, thereby ensuring a robust pipeline.
About Pharmos' CNS Product Platform
Pharmos points to several factors behind its strategic targeting of markets for neurological and inflammation-based disease treatments. Its technology utilizing synthetic, non-psychotropic cannabinoid and derivative compounds has produced molecules providing an exceptional level of neuronal protection against certain disease- and injury-related destructive biochemical and inflammatory processes in preclinical and clinical studies. Foremost in progress within this platform technology is dexanabinol, which demonstrated the ability to prevent edema and elevation of intracranial pressure through a unique combination of mechanisms of action in Phase II TBI studies, and which has an excellent safety profile. Beyond TBI, Pharmos believes its technology holds great promise in the development of safe and effective treatments for stroke, neuropathic pain, multiple sclerosis (MS) and other neurological conditions in which the pathological neuro-inflammatory sequence involved is similar to that of TBI, and for such inflammation-based disorders as myocardial infarction and renal ischemia.
The therapeutic markets targeted by Pharmos' research represent areas of great unmet need. The worldwide TBI market is estimated at approximately $1 billion annually and is currently absent of any approved therapeutics. Approximately 1.5 million TBI incidents occur each year in the U.S. More than 50,000 of its victims die, and between 80,000 and 90,000 survive with permanent disabilities. Current therapy for TBI is limited to emergency medical care, which may slow the development of damage to the brain, but falls short of securing a good neurological outcome for the patient. Pharmos expects to complete enrollment of 860 patients in its international pivotal Phase III TBI trial of dexanabinol, now underway, in 2003.
Stroke is the third leading cause of death in the U.S. and a leading cause of disability in adults. Recent data indicate the number of persons suffering a new or recurring stroke in the U.S. is roughly 730,000 per year and worldwide market size estimates for stroke treatments exceed $1 billion. The one drug approved for stroke has demonstrated the ability to prevent and reduce vascular obstruction, but due to certain limiting factors, is only administered to a small percentage of stroke patients. Pharmos is currently undertaking advanced preclinical testing of two dexanabinol derivative compounds which, in addition to allowing for a relatively long treatment window, have demonstrated both strong neuro-protective and anti-inflammatory properties in animal stroke models. Pharmos expects to conclude preclinical studies with these compounds next year.
Encouraged by preclinical and clinical results obtained in TBI and stroke studies, Pharmos is evaluating in earlier preclinical testing various molecules from its growing library of non-psychotropic cannabinoid and derivative compounds as agents to treat neuropathic pain, MS, Parkinson's disease, myocardial infarction, and other disorders in which inflammatory processes play a major pathological role. The markets for products to treat these indications have defined needs and represent sizable opportunities for therapeutics that are both safe and effective.
Pharmos Corporation discovers and develops novel therapeutics to treat a range of inflammatory and neurological disorders, such as traumatic brain injury and stroke. The Company has an extensive portfolio of drug candidates under development, as well as discovery, preclinical and clinical capabilities. |
