GlaxoSmithKline ($GSK) is punting on Horizant. The U.K.-based drugmaker is kicking the restless legs syndrome drug back to partner XenoPort after a series of setbacks, including disappointing sales and a partnership dispute.
Horizant hasn't performed up to either company's expectations. Its road to FDA approval was long and hard, but it finally won the agency's blessing last April. Sales didn't exactly skyrocket on launch, and XenoPort blamed Glaxo for the lackluster performance. In fact, after XenoPort posted just $1.3 million in first-quarter net sales, the smaller company tried to formally terminate the marketing agreement. Glaxo sued in response.
Now, however, XenoPort has its wish. Under a new agreement between the two companies, GSK's U.S. marketing and development rights will end April 30. Glaxo will spend $20 million on XenoPort stock at a 12.5% premium to recent market prices, and, until next October, XenoPort has the option to require GSK to buy another $20 million more.
Glaxo says its decision to hand Horizant back to XenoPort "is aligned with GSK's ongoing strategy to streamline its portfolio." The agreement also--not incidentally--resolves the two companies' legal dispute. Glaxo has already taken a £103 million ($164.7 million) charge for its Horizant disappointment, so the company doesn't expect any more write-offs on the drug.
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