ProStrakan, Orexo reconfigure commercial rights to Abstral

Orexo AB ("Orexo") and ProStrakan Group plc ("ProStrakan") jointly announce today that the companies have reconfigured the commercial rights to the product, Abstral, in various territories worldwide.

Abstral is the novel, rapidly-disintegrating, sublingual (under the tongue) formulation of fentanyl, a well-established opioid used for the management of episodes of breakthrough pain experienced by cancer patients who are already receiving opioid analgesics for chronic pain.

ProStrakan, which is a subsidiary of global speciality pharmaceutical company, Kyowa Hakko Kirin Co. Ltd. ("KHK"), will acquire the rights to Abstral for Europe and will also acquire Orexo's interests in the companies' joint venture business covering the Nordic region (Sweden, Norway, Finland & Denmark). Orexo will acquire all rights to Abstral in the US as from 31 December, 2012.

ProStrakan will pay to Orexo a total net cash consideration of £55.0m, of which £22.5m will be paid in 2012, £20.0m in 2013 and £12.5m in 2014. ProStrakan will make double digit royalty payments to Orexo once annual sales of Abstral exceed certain levels in EU. In addition, Orexo are entitled to further milestone payments, when EU annual sales reach certain levels. The agreement for EU is valid until the end of 2019.

As part of this alignment of Abstral rights, ProStrakan is also acquiring all existing Abstral partnership agreements in the rest of the world ("RoW"), excluding Japan, where Abstral is already out-licensed to ProStrakan's parent company, KHK.

Orexo will continue receiving sales and development milestones as well as double digit royalty payments for ProStrakan's sales of Abstral in the RoW.

Anders Lundström, Chief Executive, of Orexo said:

"I am very satisfied that Orexo now will have full commercial control of Abstral in the US, which is in complete alignment with our previously communicated strategy. With rights to Abstral and the OX219 product soon to be filed, we have a great basis for establishing Orexo with a solid commercial infrastructure in the US."

Dr Tom Stratford, Chief Executive of ProStrakan, said:

"Abstral is a valuable asset, as has been shown by the demand it has generated from oncologists across Europe and from partners elsewhere in the world. We regard this agreement as an important step forward for ProStrakan as it secures ownership of this oncology product in our European heartland and a potentially significant income stream from partnerships worldwide. In the US, where a significant proportion of the Abstral market is with pain specialists, ProStrakan will continue to focus on our oncology franchise."