With the acquisition of the U.S. sales and distribution rights of eight cardiovascular drugs from Daiichi Sankyo, Cosette Pharma of New Jersey is making a move toward diversification that it hopes will be a launching pad for future portfolio expansion and growth.
The company—established in 2018 when private equity investor Avista Capital Partners bought the dermatology business of G&W Laboratories—currently includes more than 45 products, most of them generic topical treatments.
“It’s transformational,” Cosette CEO Apurva Saraf said in an interview. “It diversifies the business into two distinct areas.”
The branded drugs Cosette gains in the transaction are aging and are subject to generic competition. The best known are former blockbusters Benicar, a beta blocker blood pressure medication, and Welchol, a cholesterol treatment. The others include Azor, Tribenzor and Effient, all of which were approved more than a decade ago.
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U.S. sales for the acquired products for the 12 months ending in November were $123 million, according to IQVIA. Terms of the sale of the treatments were not disclosed.
During a 30-month transition period, Daiichi Sankyo will transfer manufacturing, supply and commercialization of the products to Cosette.
“We will bolster our commercial team because this is a new line of business,” Saraf said. “We will be recruiting people in the next six months at all levels to strengthen the organization to integrate this business.”
Cosette manufactures its dermatology products at plants in Lincolnton, North Carolina, and South Plainfield, New Jersey.
Daiichi Sankyo, the second-largest pharmaceutical company in Japan, sought the divestiture as it sees more lucrative opportunities in developing cancer treatments.
“As part of our 2030 vision of becoming a global top 10 leader in oncology, we are shifting our structure to focus on our oncology portfolio in the U.S., while ensuring these legacy medicines continue to be available to the patients who rely on them,” Ken Keller, Daiichi’s CEO, said in a press release.
Before it lost patent protection in 2016, Benicar reached sales of $2.6 billion, which accounted for nearly a quarter of Daiichi's revenue. In 2017, Daiichi agreed to pay $300 million to settle 2,300 lawsuits tied to gastrointestinal side effects of its cardio medicines including Benicar, Azor and Tribenzor.
Daiichi’s move is similar to one made two months ago by AstraZeneca, which unloaded older respiratory medicines Eklira and Duaklir to Covis Pharma for $270 million. The deal came after another between the companies in 2018, which moved three aging treatments to Covis.
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For Cosette, this deal is a steppingstone to grow the business both within and beyond its scope.
“This gives us a commercial platform, a footprint, to now build on these assets to acquire more complex products of similar portfolios,” Saraf said. “My plan is not to simply acquire established products. The next phase is something that is patent protected and commercial.”