- GW Pharmaceuticals plc suffered another setback to its Sativex franchise on Wednesday, announcing that long-time partner Otsuka Pharmaceutical Co. Ltd. has decided to hand back rights to the cannabindoid drug.
- The companies first linked up in 2007, when Otsuka agreed to pay an $18 million signing fee and up to $273 million in potential milestones in exchange for an exclusive license to develop and market Sativex in the U.S. Through the deal, the Japanese pharma also took on all development-related costs for Sativex in the states, including clinical trials investigating the drug as a treatment for cancer pain.
- With the agreement terminated, GW regains full ownership of its drug in the U.S. — yet will still have to make contingent milestone payments to Otsuka if Sativex gains Food and Drug Administration approval or hits certain annual sales marks in the states.
Sativex (delta-9-tetrahydrocannabinol and cannabidiol) has already notched approvals in nearly 30 countries outside the U.S. as a treatment for spasticity in patients with multiple sclerosis. As far as marketed products go, however, it isn't exactly a goldmine; GW made just $8.3 million in sales of the drug during the whole of 2017.
Aside from getting an FDA OK for its other late-stage candidate Epidiolex (cannabidiol), GW's focus has been on expanding Sativex's label to include cancer pain. But a trio of Phase 3 failures in that indication has damaged those hopes — if not for GW, then for its partners.
In the company's most recent annual financial report filed with the Securities and Exchange Commission on Dec. 4, GW noted that it was in "late stage negotiations" with Otsuka for the termination of their Sativex licensing agreement. Last year, Novartis AG also ended a Sativex collaboration, in which the big pharma maintained rights to the drug in Australia, New Zealand, most Asian countries, the Middle East (excluding Israel) and Africa.
While drugmakers will often try to frame return of rights as a positive, GW has made it clear in the past that it relies on business partnerships to commercialize Sativex. Therefore, each fizzled licensing agreement puts more work on the company and a greater strain on its resources.
"Our ability to successfully market and sell Sativex in each of these markets depends entirely on the expertise and commercial skills of our collaboration partners," GW wrote in the annual report.
What's more, Otsuka was funding all the R&D efforts for Sativex in the U.S. Given that GW's revenues already can't compensate for its R&D spending — which totaled almost $150 million for the 2017 fiscal year — it's unclear how the biotech will handle any future development expenses that Otsuka normally would pick up.
Otsuka also jointly owns all intellectual property rights to Sativex patents and non-manufacturing related know-how that came about during the course of the licensing deal, and can continue to own them so long as it keeps paying for prosecution and maintenance costs related to those rights. That's important, because as long as Otsuka has some say in Sativex's intellectual property, GW "may need to seek Otsuka’s consent to out-license and/or enforce some of this collaboration intellectual property in the future," the biotech wrote.