Actavis Pays $40 Million Upfront; Snags Option To Buy Rhythm Health

DUBLIN and BOSTON, Oct. 22, 2014 /PRNewswire/ -- Actavis plc (NYSE: ACT), a leading global specialty pharmaceutical company, and Rhythm, a biopharmaceutical company, today announced that Actavis has been granted an exclusive option to acquire Rhythm's wholly owned subsidiary, Rhythm Health, Inc., which is developing relamorelin (RM-131), a peptide ghrelin agonist, for the treatment of diabetic gastroparesis and other GI functional disorders.

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Rhythm has completed a successful Phase 2 trial of relamorelin for the treatment of diabetic gastroparesis and a second successful Phase 2 trial for chronic constipation.  Rhythm expects to initiate a Phase 2b clinical trial for the treatment of diabetic gastroparesis by early 2015.

Under the terms of the agreement, Actavis will provide a $40 million upfront payment to Rhythm, and will have the option to acquire Rhythm Health, Inc. and the worldwide rights to relamorelin for an undisclosed amount following the completion of the Phase 2b study.  Actavis and Rhythm will establish a joint development committee to oversee the development of relamorelin, with Rhythm managing all aspects of the development program during the option period.

The transaction is limited to the acquisition of Rhythm Health, Inc. and does not include Rhythm's other subsidiary, Rhythm Metabolic, Inc., which is developing the MC4R peptide agonist, RM-493, for the treatment of obesity, including obesity caused by genetic deficiencies in the MC4 pathway such as Prader Willi Syndrome.  

"The option to acquire Rhythm Health, Inc. and its relamorelin development candidate demonstrates our commitment to identify unique opportunities and, through innovative business initiatives, expand our potential product franchises in core therapeutic categories," said David Nicholson, Senior Vice President, Global Brands Research and Development, Actavis.  "Relamorelin has the potential to be a significant new advance in the treatment of gastroparesis and other GI functional disorders where there is an urgent need for better therapies, particularly drugs like relamorelin that have a prokinetic mechanism of action.  If successful in development, relamorelin could provide a significant addition to our GI family, which currently includes Linzess, Delzicol/Asacol, Carafate, Canasa, Pylera and Rectiv, and for which we are currently developing eluxadoline, the product opportunity acquired earlier this year with our acquisition of Furiex Pharmaceuticals.  This venture allows Actavis, in partnership with Rhythm, to advance the development of this molecule in a manner that minimizes risk in early stage development, yet ensures our ability to acquire global rights to the product upon initiation of Phase 3 trials."

"This is a very positive partnership for both companies, and also potentially for patients with diabetic gastroparesis who have not had a new therapy for gastroparesis approved in the U.S. for more than 30 years," said Keith Gottesdiener, MD, CEO of Rhythm. "This agreement leverages Actavis' commitment and capabilities for gastroenterology drug development and commercialization, and so we are very pleased to work together on the upcoming Phase 2b study for relamorelin."

About Relamorelin (RM-131)

Relamorelin is a potent, best-in-class, Phase 2 ghrelin agonist in development for the treatment of diabetic gastroparesis and GI functional disorders. Derived from the natural ghrelin sequence, relamorelin has been optimized to stimulate gastrointestinal (GI) motility, with greater potency and enhanced stability and pharmacokinetics. Relamorelin has completed a Phase 2 trial in diabetic gastroparesis and a Phase 2a study in chronic constipation, and an additional Phase 2 trial is under way in lower GI functional disorders. The U.S. Food and Drug Administration (FDA) has granted Fast Track review status to relamorelin for the treatment of diabetic gastroparesis.

About Gastroparesis 

Diabetic gastroparesis is a disorder in which there is a substantial delay in stomach emptying along with characteristic symptoms of vomiting, nausea, abdominal pain, early satiety and bloating. Moderate to severe diabetic gastroparesis results in significant debility and hospitalizations, and can interfere with nutrition and the absorption of medications.  Gastroparesis affects a significant number of the 24 million diabetics in the U.S; an estimated 2.3 million type 1 and type 2 diabetic patients with moderate or severe gastroparesis symptoms are seeking treatment.  Available therapies to treat this disorder are limited and exhibit significant side effects.  No new therapies have been approved in the United States for the treatment of gastroparesis in more than 30 years.

About Actavis
Actavis plc (NYSE:ACT), headquartered in Dublin, Ireland, is a unique specialty pharmaceutical company focused on developing, manufacturing and commercializing high quality affordable generic and innovative branded pharmaceutical products for patients around the world. 

Actavis markets a broad portfolio of branded and generic pharmaceuticals and develops innovative medicines for patients suffering from diseases principally in the central nervous system, gastroenterology, women's health, urology, cardiovascular, respiratory and anti-infective therapeutic categories.  The company is an industry leader in product research and development, with one of the broadest brand development pipelines in the pharmaceutical industry, and a leading position in the submission of generic product applications.  Actavis has commercial operations in more than 60 countries and operates more than 30 manufacturing and distribution facilities around the world.

For more information, visit Actavis' website at www.actavis.com.

About Rhythm (WWW.RHYTHMTX.COM)

Rhythm is a biopharmaceutical company developing peptide therapeutics that address unmet needs in gastrointestinal diseases and obesity, including obesity caused by genetic deficiencies in the MC4 pathway. Rhythm is developing the ghrelin peptide agonist, relamorelin (RM-131), for the treatment of diabetic gastroparesis and other gastrointestinal functional disorders; and the MC4R peptide agonist, RM-493, for obesity, including obesity caused by genetic deficiencies in the MC4 pathway. Rhythm investors include MPM Capital, New Enterprise Associates, Third Rock Ventures, Ipsen, and Pfizer Ventures. The company is based in Boston, Massachusetts.

Actavis Forward-Looking Statement

Any statements contained in this press release that refer to future events or other non-historical facts are forward-looking statements that reflect Actavis' current perspective of existing trends and information as of the date of this release. For instance, any statements in this press release concerning prospects related to Actavis' strategic initiatives, including the option to acquire Rhythm Health, are forward-looking statements. Except as expressly required by law, Actavis disclaims any intent or obligation to update these forward-looking statements. Actual results may differ materially from Actavis' current expectations depending upon a number of factors affecting Actavis' business. These factors include, among others, successful consummation and integration of the potential Rhythm Health acquisition and the ability to recognize the anticipated benefits of the potential Rhythm Health acquisition; the anticipated size of the markets and anticipated demand for Rhythm Health's products; the impact of competitive products and pricing; the inherent uncertainty associated with financial projections; periodic dependence on a small number of products for a significant source of net revenue or income; variability of trade-buying patterns; changes in generally accepted accounting principles; the risks and uncertainties normally incident to the pharmaceutical industry; risks that the carrying values of assets may be negatively impacted by future events and circumstances; the timing and success of product launches; the difficulty of predicting the timing or outcome of product development efforts and regulatory agency approvals or actions, if any; market acceptance of and continued demand for Actavis' and Rhythm Health's products; costs and efforts to defend or enforce intellectual property rights; difficulties or delays in manufacturing; the availability and pricing of third party sourced products and materials; successful compliance with governmental regulations applicable to Actavis' and Rhythm Health's facilities, products and/or businesses; changes in the laws and regulations affecting, among other things, pricing and reimbursement of pharmaceutical products; and other risks and uncertainties detailed in Actavis' periodic public filings with the Securities and Exchange Commission, including but not limited to Actavis plc's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014. Except as expressly required by law, Actavis disclaims any intent or obligation to update these forward-looking statements.

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SOURCE Actavis plc