Valeant CEO J. Michael Pearson has turned his company into a force in a buying spree that he most recently topped off with the $8.7 billion deal that snagged Bausch + Lomb. But sometimes you can buy trouble. And the Canadian drug firm will now pay $100 million to extricate itself from a problem it picked up in the buyout of Dow Pharmaceutical Sciences (DPS) in 2009.
Valeant ($VRX) was preparing for the launch of Jublia (efinaconazole)--a drug for treating the nail fungal condition onychomycosis--last year when it it got a warning from California-based Anacor Pharmaceuticals that it had an issue with that. Turns out that DPS had done some work on Anacor's treatment for onychomycosis, and Anacor was feeling put upon by Valeant's new drug. Put upon to the tune of $215 million, Valeant delayed the launch and the two headed for arbitration.
The $100 million is the "interim final award" to Anacor Pharmaceuticals to resolve a breach of contract dispute following the arbitration hearing last month. Valeant pointed out that the award is half what Anacor was seeking. It also said, "The arbitrator did not grant an injunction or ongoing royalty, which means that, while still subject to regulatory approval, nothing in the arbitrator's order prevents the launch of Jublia."
Regulatory approval is the operative term here. In May the company said it had received a complete response letter (CRL) from the FDA for Jublia. The FDA had problems with "Chemistry, Manufacturing and Controls (CMC) related areas of the container closure apparatus." Because it is CMC concerns and not efficacy or safety issues, Valeant said it believed it could get them worked out pretty quickly. A spokeswoman did not say how the reponse to the CRL is coming only, "We do not yet have an exact timeline of approval and launch – but maybe mid-2014."
- here's the announcement