King Pharmaceuticals Buys Rights to Avinza Painkiller From Ligand Pharmaceuticals
- Drug maker King Pharmaceuticals Inc. said Thursday it agreed to buy rights to the painkiller Avinza owned by Ligand Pharmaceuticals Inc.
Under the agreement, King will pay $265 million for rights to Avinza in the U.S., its territories, and Canada. King also will assume a $48 million product liability to a third party, and all existing product royalty obligations.
Additionally, King will pay Ligand a 15 percent royalty during the first 20 months after closing, after which royalties will vary between 5 percent and 15 percent depending on total sales. Royalties will last until Avinza's patent expires in 2017.
The transaction, which is expected to close by the end of the year, is subject to antitrust review and Ligand shareholder approval.
Before closing, King will use its sales force to help sell the product. Upon closure, King will hire a large portion of Ligand's Avinza sales force, nearly doubling its current neuroscience sales force.
Avinza, which is an extended release form of morphine, generated sales of about $179 million in 2005.
King shares rose 36 cents, or 2.3 percent, to $16.29 in morning trading on the New York Stock Exchange.
Ligand shares fell 28 cents, or 2.8 percent, to $9.59 in morning trading on the Nasdaq. Shares have traded between $7.78 and $10.50 over the past 52 weeks.
- Drug maker King Pharmaceuticals Inc. said Thursday it agreed to buy rights to the painkiller Avinza owned by Ligand Pharmaceuticals Inc.
Under the agreement, King will pay $265 million for rights to Avinza in the U.S., its territories, and Canada. King also will assume a $48 million product liability to a third party, and all existing product royalty obligations.
Additionally, King will pay Ligand a 15 percent royalty during the first 20 months after closing, after which royalties will vary between 5 percent and 15 percent depending on total sales. Royalties will last until Avinza's patent expires in 2017.
The transaction, which is expected to close by the end of the year, is subject to antitrust review and Ligand shareholder approval.
Before closing, King will use its sales force to help sell the product. Upon closure, King will hire a large portion of Ligand's Avinza sales force, nearly doubling its current neuroscience sales force.
Avinza, which is an extended release form of morphine, generated sales of about $179 million in 2005.
King shares rose 36 cents, or 2.3 percent, to $16.29 in morning trading on the New York Stock Exchange.
Ligand shares fell 28 cents, or 2.8 percent, to $9.59 in morning trading on the Nasdaq. Shares have traded between $7.78 and $10.50 over the past 52 weeks.
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9:34 AM
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