RedHill Licenses AstraZeneca's Movantik for $68 Million

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RedHill Biopharma, based in Tel Aviv, Israel and Raleigh, North Carolina, acquired the global rights to AstraZeneca’s Movantik (naloxegol) excluding Europe, Canada and Israel. Movantik is indicated for opioid-induced constipation (OIC) in adults with chronic non-cancer pain, including patients with chronic pain related to previous cancer or its treatment who don’t require regular opioid dosage escalation.

Movantik is a peripherally acting mu-opioid receptor antagonist (PAMORA). Last year, Movantik created $96 million in U.S. net sales. RedHill plans to increase its U.S. sales force to about 150 people to promote Movantik to gastroenterologists, primary care doctors, and other specialists.

Under the license deal, RedHill is paying AstraZeneca $52.5 million up front with another non-contingent payment of $15 million 18 months after the deal closes. RedHill will also take over the sales-based royalties and potential milestone payments AstraZeneca must pay to Nektar Therapeutics, the company that originally created Movantik.

AstraZeneca will continue manufacturing and supplying Movantik to RedHill during the transition period. In 2015, AstraZeneca inked a co-commercialization deal with Daiichi Sankyo for Movantik in the U.S. This will also be transferred to RedHill.

RedHill plans to head up all U.S. commercialization activities for the drug and will continue to split costs and pay sales-related commissions to Daiichi Sankyo.

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“The acquisition of Movantik is a transformative event for RedHill,” said Dror Ben-Asher, RedHill’s chief executive officer. “We would like to thank AstraZeneca for entrusting us with this important product.”

Ben-Asher added, “Along with the planned launch of Talicia later this quarter and the ongoing promotion of Aemcolo to gastroenterologists, primary care physicians and other specialists, the acquisition of Movantik further positions RedHill as an emerging GI-focused leader.”

RedHill also announced today that it has entered into a non-dilutive, royalty-backed term loan deal with private investment firm HealthCare Royalty Partners (HCR), with HCR committing up to $115 million in support of the company’s U.S. Commercial operations.

“This non-dilutive financing will support the acquisition of rights to Movantik from AstraZeneca, the planned U.S. launch of Talicia this quarter and the ongoing promotion of Aemcolo,” said Micha Ben Chorin, RedHill’s chief financial officer. “We would like to thank HCR for their confidence and support and look forward to a fruitful partnership.”

Under the terms of the arrangement, RedHill will receive $30 million after closing to support its commercial operations. It will then receive another $50 million to fund the Movantik deal. There will be two more tranches totaling $35 million. HCR will be eligible for royalties in the low-single digits based on RedHill’s worldwide net revenues. These are subject to a cap as well as interest on the outstanding term loan that will be calculated as the three-month LIBOR rate plus a single-digit interest rate.

Aemcolo (rifamycin) is an oral antibiotic approved for travelers’ diarrhea caused by non-invasive strains of E. coli in adults. RedHill entered into an exclusive license deal for it in October 2019 with Cosmo Pharmaceuticals for U.S. rights.

Talicia is an antibiotic to treat Helicobacter pylori infection in adults. The company also has several late-stage development programs, including RHB-104 for Crohn’s disease, RHB-204 for pulmonary nontuberculosis mycobacteria infections, RHB-102 (Bekinda) for acute gastroenteritis and gastritis, and several others.

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