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GlaxoSmithKline agreed to acquire Reliant Pharmaceuticals for $1.65 billion in cash.
London (Nov. 21)-GlaxoSmithKline agreed to acquire Reliant Pharmaceuticals (Liberty Corner, NJ) for $1.65 billion in cash. Reliant is a privately held specialty pharmaceutical company with a focus on cardiovascular drugs.
Reliant holds the US rights to “Lovaza” (omega-3-acid ethyl esters), a drug for treating high levels of triglycerides. Launched in late 2005, Lovaza (formerly known as “Omacor”) had sales of $206 million for the first nine months of 2007, accounting for 60% of Reliant sales for this period. Reliant had sales of $341 million for the first nine months of 2007. Lovaza competes in the nonstatin dyslipidemia segment of the US cardiovascular drug market and held 10% of this segment as of Sept. 30, 2007, according to a GlaxoSmithKline release.
“The addition of Lovaza to the GSK portfolio adds a new driver of sales growth in the US business,” said Chris Viehbacher, president of US Pharmaceuticals for GlaxoSmithKline. “It represents a strong strategic fit, complementing ‘Coreg CR’, a leading treatment for heart failure and hypertension, and adds to our growing profile in the cardiovascular disease area.”
Reliant Pharmaceuticals secured the US rights to Lovaza from Pronova BioPharma (Lysaker, Norway), a publicly traded company that specializes in the research, development, and manufacture of marine-originated omega-3 derived pharmaceutical products. Pronova licenses the rights to Lovaza in other markets to several other companies.
Pronova BioPharma will continue to supply the product’s primary material. Pronova is the sole source supplier for the active pharmaceutical ingredient (API) in Lovaza, according to Reliant Pharmaceuticals’ August 2007 S-I filing for an initial public offering with the US Securities and Exchange Commission. Through the first six months of 2007, Pronova produced at its facility in Sandefjord, Norway, an annual quantity of approximately 780 metric tons of the API used in Lovaza and other products marketed outside of the United States. In 2006, Reliant Pharmaceuticals purchased approximately 315 metric tons of the API and expects that its total purchase requirements for 2007 will be approximately 650 metric tons, according to the S-1 filing.
In 2006, Pronova announced plans to expand its manufacturing capabilities to be able to produce approximately 1000 metric tons of the API in Lovaza by the third quarter of 2007 and approximately 1200 metric tons by the end of 2007, according to Reliant’s prospectus. In April 2007, Pronova experienced an unexpected setback in its manufacturing capability due to an equipment malfunction, which resulted in a reduction of capacity of approximately 50% for approximately one month, which has since been resolved. Pronova is planning to add a second manufacturing facility in Kalundborg, Denmark, for producing the API for Lovaza. Pronova received board approval for the project in October 2007 and planned to begin construction for the facility in 2007, according to a company release. The new facility would double current production capacity for the API. The facility is expected to be completed and approved by the US Food and Drug Administration by the first half of 2010.
In addition to Lovaza, Reliant Pharmaceuticals markets three other in-licensed cardiovascular products: “DynaCirc CR,” (isradipine), “InnoPran XL” (propanolol HCl), and “Rythmol SR” (propafenone).
Reliant Pharmaceuticals does not have manufacturing facilities and uses third-party manufacturers for producing these products and the APIs for these products, according to the company’s S-1 filing. Abbott GmbH & Co. KG (Ludwigshafen, Germany) is the exclusive manufacturer of Rythmol SR and supplier of propafenone, the API in Rythmol SR. DynaCirc CR is manufactured by Patheon Pharmaceuticals (Toronto, ON, Canada) and Novartis Consumer Health (Parsippany, NJ). Shasun Chemicals and Drugs (Mumbai, India) supplies isradipine, the API in DynaCirc CR, and Eurand America (Vandalia, OH) supplies propanolol, the API in InnoPran XL.