Abbott to buy rights to endometriosis drug

Posted June 16, 2010 at 6:00 a.m.

Dow Jones Newswires | Abbott Laboratories has agreed to pay as
much as $575 million as part of a deal to help develop and
commercialize Neurocrine Biosciences Inc.’s endometriosis treatment.


The deal follows Neurocrine’s announcement last month of positive data from a Phase 2 study of the drug. The drug developer said it would be ready for Phase 3 clinical trials later this year.

Under the agreement, Abbott will receive worldwide exclusive rights to develop and commercialize the drug. It will pay Neurocrine $75 million up front and fund future development activities. Neurocrine is eligible for eight additional milestone payments of about $500 million combined as well as royalties from any product sales.

A host of pharmaceutical companies have been inking deals with drug developers in hopes of bolster their own pipelines, many of which lack the potential blockbusters of yesteryear.

Endometriosis is associated with a number of symptoms, some of the most common of which include pain related both to menstruation and sexual intercourse as well as chronic pelvic pain throughout the menstrual cycle. According to Neurocrine, the World Endometriosis Research Foundation estimates there are about 100 million women worldwide who suffer from endometriosis, including 7.5 million in the U.S.

Abbott weathered the economic downturn better than some because of its broad product base. It benefits from a relative lack of exposure to patent expirations, shielding it from the woes that have plagued pharmaceutical giants. Sales rose in its latest quarter as profit fell on prior-year gains.

Neurocrine hasn’t been profitable but has seen losses narrow in recent quarters.

Niether company’s shares were active in premarket trading. Abbott closed Tuesday at $48.17 while Neurocrine Biosciences finished at $4.70.

 

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