Columbia Laboratories, Inc. (Nasdaq: CBRX) has entered into a definitive
agreement to sell substantially all of its progesterone related assets
and 11.2 million shares of common stock to Watson Pharmaceuticals, Inc.
(NYSE: WPI) for a $47 million upfront payment plus royalties of 10 to 20
percent of annual net sales of certain progesterone products. Additional
payments up to $45.5 million can be earned by the successful completion
of clinical development milestones in the ongoing PREGNANT Study,
regulatory filings, receipt of regulatory approvals and product
launches. Watson will fund the development of a second-generation
vaginal progesterone product as part of a comprehensive life-cycle
management strategy. Watson will also have the right to designate a
member of Columbia's Board of Directors. The transaction was unanimously
approved by Columbia’s Board of Directors. Its closing is subject to
customary conditions, including approval by Columbia’s stockholders. It
is expected to close during the second quarter of 2010.
“With
a strong heritage in women’s health, an expanding pipeline of additional
distinctive products in this category, and a sales team committed to
serving OB/GYNs and women’s health providers, Watson is uniquely
positioned to make this agreement a significant win-win for both
parties, and for patients.”
“With their commitment to women’s health and significant sales
resources, Watson is a great strategic fit for our progesterone
business,” said Frank C. Condella, Jr., Columbia’s interim chief
executive officer. “Watson has a field force of 350 representatives
calling on OB/GYNs and urologists, plus specialists to focus on
infertility clinics. Because of the structure of its sales force, Watson
has the capability to expand sales resources for CRINONE® as
required, and we are confident in their ability to execute a strong
launch in the new short cervix preterm birth indication, assuming data
from the PREGNANT Study are positive and the product is approved for
this new indication by the FDA.”
“The addition of CRINONE® to our branded products business is
in line with our stated objective to grow our women’s health franchise,”
said Paul Bisaro, president and chief executive officer of Watson. “With
a strong heritage in women’s health, an expanding pipeline of additional
distinctive products in this category, and a sales team committed to
serving OB/GYNs and women’s health providers, Watson is uniquely
positioned to make this agreement a significant win-win for both
parties, and for patients.”
After the sale of these assets, Columbia’s business will consist of
domestic and international royalties and milestone payments,
manufacturing revenues from CRINONE® and PROCHIEVE®,
STRIANT® sales, and its bioadhesive drug delivery
technologies, which include bioadhesive vaginal gel, buccal system and
progressive hydration tablet delivery mechanisms. Also, Columbia will
retain certain assets and rights to its progesterone business, including
all rights necessary to perform its obligations under its agreement with
Merck Serono S.A.
Torreya Partners LLC acted as financial advisor to Columbia, Kaye
Scholer LLP acted as legal advisor to Columbia, and RBC Capital Markets
provided a fairness opinion to Columbia’s Board of Directors in
connection with the transaction.