Warner Chilcott plc has agreed to terminate its existing co-promotion agreement
with Novartis and signed a definitive agreement to purchase the U.S. rights to
Enablex from Novartis for $400 million in cash. Enablex (darifenacin) is a
product indicated to treat adults with symptoms of overactive bladder, which
sales of approximately $190 million for the year ended December 31, 2009.
The transaction remains subject to clearance under the Hart-Scott-Rodino
Antitrust Improvements Act and other customary closing conditions, and is
expected to close by the end of October 2010.
“This is an important step in expanding our presence in
one of our key therapeutic segments,” said Roger Boissonneault, Warner
Chilcott’s president and chief executive officer. “The acquisition of the U.S. rights to
Enablexbolsters our franchise in the urology segment, provides us with greater
control in promoting the product and demonstrates our ability to successfully
add complementary assets to an already strong product portfolio.” Warner
Chilcott will make an upfront $400 million cash payment to Novartis and may be
required to make future milestone payments aggregating up to $20 million.
Novartis retains the rights to Enablex for all countries outside the U.S.
At the closing of the transaction, Warner Chilcott will assume full control of
sales and marketing of Enablex for the U.S.
market, and expects to assume manufacturing control for the U.S. within three years.
Prior to this announcement, Warner Chilcott co-promoted
Enablex with Novartis in the U.S.
pursuant to an agreement that it assumed upon its purchase of the global
branded prescription pharmaceuticals business of The Procter & Gamble
Company in October 2009. Under the terms of the co-promotion agreement, Warner
Chilcott and Novartis shared development and promotion costs relating to the
U.S. Enablex business and Warner Chilcott received a contractual percentage of
Novartis’ sales of Enablex in the U.S., which Warner Chilcott
recorded on a net basis in “other revenue”. Under that agreement,
Warner Chilcott was also obligated to incur an agreed upon amount for
advertising, promotion and selling costs each fiscal year. Following completion
of the transaction, Warner Chilcott will recognize all sales of Enablex in the U.S.
as revenues, as well as all expenses relating to such sales. The Company
expects this transaction will have a modestly accretive impact on the Company’s
2010 adjusted cash net income and adjusted cash net income per share following
Enablex was approved by the U.S. Food and Drug
Administration in 2004 for the treatment of overactive bladder, and launched in