WOODCLIFF LAKE, N.J., Sept. 7 /PRNewswire-FirstCall/ -- Barr Pharmaceuticals, Inc. today announced that it has exercised its option to make a one-time royalty payment of $19 million to Eastern Virginia Medical School (EVMS) related to Barr's exclusive research and license agreement for the SEASONALE(R) extended-cycle oral contraceptive. Under terms of the licensing agreement, Barr had the option of paying a perpetual royalty based on a percentage of net profits, or exercising its right to make the one- time payment prior to the first anniversary of the approval date of the SEASONALE product by FDA.
"Since the launch, more than 260,000 prescriptions have been filled for SEASONALE, and we anticipate continued strong growth for this exciting contraceptive option. We also continue to work on other extended-cycle oral contraceptives that will broaden this product franchise," said Bruce L. Downey, Chairman and Chief Executive Officer. "By exercising our option to make this one-time royalty payment, we have satisfied all future royalty obligations to EVMS and provided them with a substantial return on the research conducted at their outstanding institution."
The $19 million one-time royalty payment will initially be capitalized, and ultimately expensed over the estimated lives of the products marketed by Barr under the license agreement.
Barr launched the SEASONALE extended-cycle oral contraceptive in November 2003 to healthcare providers following FDA approval of the product for the prevention of pregnancy. SEASONALE was developed under a research and license agreement with EVMS. At the time of FDA approval, SEASONALE was granted a three-year New Product Exclusivity that expires on September 5, 2006. The patent covering SEASONALE expires in 2017.
SEASONALE, the first and only FDA-approved extended-cycle oral contraceptive indicated for the prevention of pregnancy, is a 91-day regimen taken daily as 84 active tablets of 0.15 mg of levonorgestrel/0.03 mg of ethinyl estradiol, followed by 7 inactive tablets and is designed to reduce the number of periods from 13 to 4 per year.
Barr currently details the product to physicians and other healthcare providers with its 250-person Duramed Pharmaceuticals, Inc. Women's Healthcare Sales Force. Duramed is a subsidiary of Barr Pharmaceuticals, Inc.
Important Information About Oral Contraceptives
It is estimated that more than 16 million women currently take oral contraceptives in the United States. Oral contraceptives are not for every woman. Serious as well as minor side effects have been reported with the use of hormonal contraceptives. Serious risks include blood clots, stroke, and heart attack. Cigarette smoking increases the risk of serious cardiovascular side effects, especially in women over 35 years. Oral contraceptives do not protect against HIV infection (AIDS) and other sexually transmitted diseases.
Use of SEASONALE provides women with more hormonal exposure on a yearly basis than conventional monthly oral contraceptives containing similar strength synthetic estrogens and progestins (an additional 9 weeks per year). While this added exposure may pose an additional risk of thrombotic and thromboembolic disease, studies to date with SEASONALE have not suggested an increased risk of these disorders. The convenience of fewer menses (4 vs. 13 per year) should be weighed against the inconvenience of increased intermenstrual bleeding/spotting.
Eastern Virginia Medical School is located in Norfolk, Virginia. Founded in 1973, its Department of Obstetrics and Gynecology includes the Jones Institute for Reproductive Medicine, which was responsible for the birth of America's first baby conceived through in-vitro fertilization and the creation of SEASONALE technology.
Barr Pharmaceuticals, Inc., a holding company that operates through its principal subsidiaries, Barr Laboratories, Inc. and Duramed Pharmaceuticals, Inc., is engaged in the development, manufacture and marketing of generic and proprietary pharmaceuticals.
This press release contains a number of forward-looking statements. To the extent that any statements made in this press release contain information that is not historical, these statements are essentially forward-looking. Forward- looking statements can be identified by their use of words such as "expects," "plans," "will," "may," "anticipates," "believes," "should," "intends," "estimates" and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include: the difficulty in predicting the timing and outcome of legal proceedings, including patent-related matters such as patent challenge settlements and patent infringement cases; the difficulty of predicting the timing of U.S. Food and Drug Administration, or FDA, approvals; court and FDA decisions on exclusivity periods; the ability of competitors to extend exclusivity periods for their products; the success of our product development activities; market and customer acceptance and demand for our pharmaceutical products; our dependence on revenues from significant customers; reimbursement policies of third party payors; our dependence on revenues from significant products; the use of estimates in the preparation of our financial statements; the impact of competitive products and pricing; the ability to develop and launch new products on a timely basis; the availability of raw materials; the availability of any product we purchase and sell as a distributor; our mix of product sales between manufactured products, which typically have higher margins, and distributed products, which typically have lower margins, during any given period; the regulatory environment; our exposure to product liability and other lawsuits and contingencies; the increasing cost of insurance and the availability of product liability insurance coverage; our timely and successful completion of strategic initiatives, including integrating companies and products we acquire and implementing new enterprise resource planning systems; fluctuations in operating results, including the effects on such results from spending for research and development, sales and marketing activities and patent challenge activities; and other risks detailed from time-to-time in our filings with the Securities and Exchange Commission.
Barr Pharmaceuticals, Inc.