Zogenix jettisons controversial pain med Zohydro for $100M-plus

Zogenix ($ZGNX) has taken plenty of heat over Zohydro, the all-hydrocodone painkiller that critics say is too easy for opioid addicts to abuse. But under a deal announced on Tuesday, those critics will no longer be the San Diego company's concern.

Zogenix is shipping off Zohydro--as well as R&D projects for follow-up, abuse-deterrent versions--to New Jersey's Pernix Therapeutics ($PTX), in exchange for $100 million up front and up to $283.5 million in milestones. And with that, Zogenix is dipping out of the pain field altogether.

Instead, the CNS-focused company will put the deal proceeds toward a pair of late-stage candidates: ZX008, a prospect for Dravet syndrome, and Relday, for schizophrenia. And it'll do so with significantly reduced operating and R&D expenses, Zogenix said.

As for Pernix, the deal will double its commercial footprint overnight. Pernix will take on Zogenix's reps, as well as a brand that fits right in with its own CNS lineup. Pernix also sees synergies with its insomnia treatment Silenor: Those 100 sales folks can hawk the med for patients taking Zohydro for pain.

"We are pleased to welcome the Zohydro ER team into the Pernix organization and are excited at the prospect of an additional 100 sales professionals promoting Silenor," CEO Doug Drysdale said in a statement.

But the Pernix force will have its work cut out for it. While the FDA has approved a tamper-resistant version of Zohydro, it won't be able to use abuse deterrence as a selling point until the company submits further data for a label update--something Zogenix said it was planning for the second half of this year.

Meanwhile, there's a rival on the scene from opioid maker Purdue Pharma, whose own hydrocodone-only product Hysingla snagged a regulatory green light late last year. And unlike Zohydro, Purdue's product label already boasts its abuse-deterrent properties.

- read Zogenix's release
- read Pernix's release

Special Report: Pharma's top 10 M&A deals of 2014