BioMarin Reacquires Kuvan from Merck Serono in Deal Worth More than $500 Million

October 1, 2015
By Alex Keown, BioSpace.com Breaking News Staff

SAN RAFAEL, Calif. – BioMarin Pharmaceutical Inc. struck a deal with Merck Serono to reacquire all global rights to Kuvan and the experimental pegvaliase for more than $500 million in upfront and milestone payments, the company announced this morning.

Under terms of the deal, BioMarin will pay Merck $380 million upfront, then milestone payments of up to $200 million depending on future sales achievements.

BioMarin said the reacquisition of Kuvan will provide the company with “numerous operational and strategic synergies.” The company said reacquiring Kuvan is expected to bring an additional $70 to $80 million in annual revenue next year. Total Kuvan revenue is expected to be between $320 million and $350 million.

“We will leverage our established worldwide infrastructure and strong relationships within the PKU community to ensure that patients globally have access to Kuvan, and potentially pegvaliase upon approval. We look forward to expanding our PKU franchise beyond the US and Canadian markets and into our existing commercial footprint of about 60 countries where Kuvan is currently sold," Jean-Jacques Bienaimé, chairman and chief executive officer of BioMarin said in a statement.

While BioMarin is expecting the reacquisition of Kuvan to bolster revenue, investors were not buoyed by the news. were down slightly this morning, hitting a morning low of $103.61 per share.

With the potential approval of pegvaliase, the two products combined will expand BioMarin's role in providing a wider range of treatment options to patients with PKU, the company said. Phenylketonuria (PKU) is a rare inherited disorder that “causes an amino acid called phenylalanine to build up in your body. PKU is caused by a defect in the gene that helps create the enzyme needed to break down phenylalanine,” according to the Mayo Clinic. Without the enzyme, the body is unable to break down foods high in protein, which can lead to serious health issues.

In 2005, Merck acquired the rights to Kuvan outside the United States and in Japan from BioMarin. Prior to the reacquisition of Kuvan, BioMarin had rights to Kuvan in the United States and Canada and to pegvaliase, also known as Peg-Pal, in the United States and Japan.

Approved in 2007 in the U.S., Kuvan is a commercialized product for the treatment of patients with phenylketonuria (PKU). Pegvaliase is currently in registration-enabling pivotal studies as a potential therapeutic option for adult patients with phenylketonuria. Kuvan has Orphan Drug exclusivity in Europe until 2020.

Belen Garijo, a member of Merck’s board of directors, said in a statement that selling the rights to Kuvan and Peg-Pal, will allow the German-based company to focus on its core business of cancer, immunology and neurology.

The transaction is expected to be completed by the end of this year and beginning in 2016. BioMarin said it will begin “commercializing and recording revenue from all global sales of Kuvan, with the exception of Japan.”

In August, BioMarin sold its experimental breast cancer treatment talazoparib for more than $500 million. Talazoparib in an oral poly ADP ribose polymerase (PARP) inhibitor. It is currently being studied in a Phase III trial for deleterious germline BRCA 1 and BRCA 2 mutations and locally advanced and/or metastatic breast cancer.

Also in August, BioMarin announced the U.S. Food and Drug Administration (FDA) had granted its drug, drisapersen, rare pediatric disease designation for Duchenne Muscular Dystrophy (DMD). Drisapersen had been granted Orphan and Fast Track status, as well as Breakthrough Therapy designation by the FDA.