- In a deal that could be valued as high as $490 million, Xenoport is selling its psoriasis drug, XP23829, to Dr. Reddy's, which is based in Hyderabad, India.
- CA-based Xenoport has struggled with mixed clinical trial results for its psoriasis candidate and financial woes that led to layoffs of 25 workers, according to Fierce. In addition, Robert Barrett, the company's CEO and one of its founders, announced he will soon be retiring.
- Xenoport is planning to divest its entire R&D portfolio, with the exception of its one FDA-approved drug, Horizant, which is currently approved for restless leg syndrome.
It's been a rough road for Xenoport, which was founded in 2009 and went on to develop a small pipeline of drugs including XP23829, a drug for Parkinson's disease, Horizant---all of which are either for sale or have been sold, except for Horizant.
Dr. Reddy's is a willing buyer and in a position to develop XP23829. The company is planning to integrate the drug, an oral tablet, into its existing internal development efforts, which have been focused heavily on mild-to-moderate psoriasis. Although XenoPort recently announced mixed phase 2 results, Dr. Reddy's sees real potential not only for psoriasis, but also for relapsing-remitting multiple sclerosis (RRMS).
Raghav Chari, head of the Proprietary Products Group at Dr. Reddy's, said, "XP23829 complements our internal development efforts, which have primarily focused on the mild-to-moderate psoriasis segment to date...We intend to initiate the registration program for XP23829 as soon as feasible so that we can accelerate the availability of this important treatment choice for moderate-to-severe psoriasis patients in the U.S. market."
The deal is structured so that Dr. Reddy's will pay XenoPort $47.5 million up front, with an additional $2.5 million forthcoming in exchange for transfer of certain clinical trial materials. In addition, various milestone and royalty payments could add another $400-plus million to the deal in the long term.
As for XenoPort's heightened focus on Horizant, the goal is to turn what has been a disappointment---previous partner GSK decamped in 2012 shortly after launch---into a success by broadening the label. Horizant happens to have an MOA, which may work well for patients with alcohol use disorder (AUD).
Assuming that Horizant gets the AUD approval, the market is fairly large and targeted. According to the National Institutes of Health (NIH), AUD affects about 16.6 million adults in the United States and has an estimated societal cost of $223.5 billion each year.