- Eager to build its U.S. commercialization presence, RedHill Biopharma announced on Tuesday a new agreement that gives the company select marketing rights to a irritable bowel syndrome (IBS) legacy drug from Concordia International Corp.
- Donnatal (phenobarbital, hyoscyamine sulfate, atropine sulfate, scopolamine hydrobromide) has been around for decades and functions as a muscle relaxant, which helps treat the intestinal cramping found in patients with IBS.
- Concordia acquired the treatment in 2014 from Revive Pharmaceuticals for $265 million in cash and stock. Donnatal brought in nearly $50 million in annual revenue during 2013, but sales haven't been so lucrative as of late.
The deal is another step for RedHill as it works to beef up U.S. marketing operations ahead of launching its own gastrointestinal and inflammation products. The Israeli company has two drugs through clinical trials and plans on conducting a Phase 3 confirmatory trial for an H. pylori bacterial infection treatment in the first half of 2017.
On Concordia's end, the deal will hopefully drum up more sales for its struggling North American division.
Third quarter revenues from the region dropped almost 50% to $45.5 million from the same period in 2015, "primarily due to lower revenue from Donnatal of $11.3 million, which was driven by lower product demand as a result of competitive pressures," the company said in 6-K filing with the Securities and Exchange Commission.
"RedHill’s commercial team is highly motivated and has previous experience in gastroenterology sales," Concordia's CEO Allan Oberman said in a Jan. 3 statement. "We look forward to partnering with them to market Donnatal to more key prescribers who we believe can help raise the product’s profile and potentially allow us to reach more patients in the U.S."
An uptick in Donnatal sales, while welcome, likely won't bandage the bigger problems Concordia faces. Like many other specialty pharmas, the Canadian company has found itself in the storm of backlash related to mounting drug prices. It also said goodbye to former CEO Mark Thompson and CFO Adrian de Saldanha earlier this year, adding another layer of upheaval.