Forest ties up with Brazil's Moksha8 in up to $125M alliance

Brazil's Moksha8 may be saying goodbye to Watson Pharmaceuticals ($WPI) as a minority owner. But it's saying hello to new business from the U.S. generics company--and a brand new partnership with Forest Laboratories ($FRX). The latter not only wins Moksha8 up to $125 million in financing over the next two years; it also gives Forest the option to buy the Brazilian firm in 2014.

Watson says it has sold off its minority stake in Moksha8--acquired in a $30 million financing deal--for $47 million. It's part of a global sorting-out as Watson finalizes its $5.6 billion Actavis acquisition, Global Brands and Biosimilars Chief Fred Wilkinson said in a release. "[W]e are realigning our corporate structure and ownership of assets in jurisdictions around the world," Wilkinson said.

Meanwhile, Watson is expanding its sales-and-marketing deal with the Brazilian company. Moksha8 will get licenses to 5 of its CNS products--the company's specialty--for development in Brazil and Mexico. Both Latin American markets are among the fastest-growing in pharma, so drugmakers are constantly tweaking their expansion strategies there.

Forest Laboratories is also looking to Moksha8's CNS experience. The U.S. drugmaker, which is scrambling to replace revenues lost to generic competition for its Lexapro antidepressant, signed a strategic alliance-cum-merger option with Moksha8. The partnership's first project: Commercialize Forest's new antidepressant Viibryd in Latin America. More drugs could follow, aided by that $125 million in tranch-by-tranch financing.

The Moksha8 deal gives Forest "access in a risk controlled manner to a high quality commercial operation in Latin America," SVP David Solomon said in a statement. "Moksha8 is uniquely positioned to commercialize novel products such as Viibryd in Latin America, and Forest will augment the Moksha8 pipeline through our broad global partner network and business development reach." Wilkinson says the Forest-Moksha8 alliance will comprise products that are complementary to its own branded generic CNS drugs.

- read the Forest release
- see the Watson statement

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