Correction: An earlier version of this story misstated the minimum royalties due to Pozen. The article has been revised to reflect the correct royalty information.
The U.S. rights to pain reliever Vimovo have been sold to Horizon Pharma by AstraZeneca, Pozen announced early Tuesday.
The key to the deal for Pozen is guaranteed annual minimum royalty payments for Vimovo, an osteo-arthritis drug, the Chapel Hill-based company says.
Payments are set at $5 in 2014 and $7.5 million annually thereafter, Pozen said.
The announcement came after Pozen and AstraZeneca – which have had a troubling relationship – began to officially unravel in September.
Pozen (Nasdaq: POZN) and AstraZeneca (NYSE: AZN) at that time amended their agreement on osteo-arthritis drug Vimovo, paving the way for the unraveling of a drug partnership dating to 2006.
If pharma giant AstraZeneca divests to a third party its rights to sell and market Vimovo in the United States, AstraZeneca will be relieved of its obligations under the agreement, according to a Pozen regulatory filing. The revised agreement releases each company from obligations of the agreement effective the date of a divestiture of the drug.
That divestiture is taking place in the AstraZeneca-Horizon agreement.
AstraZeneca had been responsible for marketing and selling Vimovo. But AstraZeneca has already signaled its own frustrations with the failure of the drug to take off in sales. In May, AstraZeneca said that it would stop promoting Vimovo in most countries, including the United States and Europe, by the end of the third quarter. Vimovo is approved in 71 countries and the drug will still be available to patients. But AstraZeneca will not be putting the full weight of its salesforce into promoting the drug.
“We are very pleased that Horizon will take over the sales and marketing of Vimovo in the United States,” said John Plachetka, chairman and chief executive officer of POZEN. “As evidenced by their experience in the osteoarthritis market, we believe that the management team and the employees of Horizon are uniquely qualified to significantly increase sales of Vimovo. We also extend our gratitude to AstraZeneca for their role in making this transaction possible, and for their continuing efforts to maximize the commercial potential of Vimovo outside the U.S.”
Under the new agreement, Horizon will pay Pozen a 10 percent royalty.
AstraZeneca retains rights to Vimovo outside the U.S.