XenoPort, Inc. (Nasdaq:XNPT) announced today that it has reached an agreement with Glaxo Group Limited (GSK) to terminate their collaboration agreement concerning Horizant® (gabapentin enacarbil) Extended-Release Tablets, for which GSK held commercialization rights and certain development rights in the United States.
Pursuant to a termination and transition agreement entered into between the parties, GSK is returning Horizant rights to XenoPort and providing certain assistance during a transition period. The termination and transition agreement also provides for a mutual release of claims and resolves all ongoing litigation between the parties. XenoPort acknowledges that GSK fulfilled its contractual obligations on the development, manufacturing and commercialization of Horizant.
During the transition period that will end on April 30, 2013, GSK will continue to exclusively commercialize, promote, manufacture and distribute Horizant in the United States. XenoPort will not be responsible for any losses associated with the terminated collaboration agreement, and XenoPort will not receive any revenue or incur any losses from GSK’s sales of Horizant during the transition period. GSK will also continue to fully fund the costs associated with the management and conduct of clinical studies initiated by GSK prior to the date of the termination and transition agreement. In addition, prior to the end of the transition period, GSK will provide to XenoPort inventory of gabapentin enacarbil in GSK’s possession that is not required for use by GSK in the manufacture of Horizant. In exchange for such inventory, XenoPort will make annual payments to GSK of $1.0 million for six years beginning in 2016.
Following the transition period, XenoPort will assume all responsibilities for further development, manufacturing and commercialization of Horizant in the United States. GSK has also agreed that, if requested by XenoPort, GSK will continue to supply Horizant tablets to XenoPort for up to an additional six months following the transition period on pricing terms established under the termination and transition agreement and to be further memorialized in a supply agreement to be entered into between the parties.
As part of the termination and transition agreement, GSK is purchasing $20.0 million of common stock of XenoPort, or an aggregate of 1,841,112 shares at $10.863 per share, which per share price represents a 12.5 percent premium to the average of the closing prices of XenoPort’s common stock for the 10 trading days prior to October 31, 2012. In addition, subject to the conditions and limitations set forth in a separate stock purchase agreement entered into between the parties, during the next six months, XenoPort has the option to require GSK to purchase up to an additional $20.0 million of common stock of XenoPort at a 12.5 percent premium to the average of the closing prices of XenoPort’s common stock for the 10 trading days prior to the day XenoPort notifies GSK of its decision to exercise this option.
XenoPort will host a conference call at 8:30 a.m. Eastern Time today to discuss matters related to the termination and transition agreement between GSK and XenoPort. To access the conference call via the Internet, go to www.XenoPort.com. To access the live conference call via phone, dial 1-888-275-3514. International callers may access the live call by dialing 706-679-1417. The reference number to enter the call is 69518395.
The replay of the conference call may be accessed after 8:30 a.m. Eastern Time today via the Internet, at www.XenoPort.com, or via phone at 1-800-642-1687 for domestic callers, or 706-645-9291 for international callers. The reference number to enter the replay of the call is 69518395. Dial-in access to the replay of the call will be available for approximately one week, and the Internet replay of the call will be available for approximately one month following the live call.
XenoPort is a biopharmaceutical company focused on developing and commercializing a portfolio of internally discovered product candidates for the potential treatment of neurological disorders. GlaxoSmithKline holds commercialization rights for Horizant in the United States during a transition period, following which XenoPort will be responsible for Horizant’s further development, manufacturing and commercialization. Regnite® (gabapentin enacarbil) Extended-Release Tablets is approved for the treatment of moderate-to-severe primary restless legs syndrome in Japan. Astellas Pharma Inc. holds all development and commercialization rights for Regnite in Japan and five other Asian countries. XenoPort holds all other world-wide rights to gabapentin enacarbil. XenoPort’s pipeline of product candidates includes potential treatments for patients with spasticity, Parkinson’s disease and relapsing-remitting multiple sclerosis.
To learn more about XenoPort, please visit the Web site at www.XenoPort.com.
This press release contains "forward-looking" statements, including, without limitation, all statements related to the transition of all Horizant product rights to XenoPort and the timing thereof; transition activities, including GSK’s conduct and funding of clinical trials; XenoPort’s election of its option to require GSK to purchase additional shares of its common stock; the terms of a future supply agreement, if any; and the continued availability of Horizant to patients. Words such as “will,” “would” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon XenoPort’s current expectations. Forward-looking statements involve risks and uncertainties. XenoPort’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to XenoPort’s dependence on GSK for further development, manufacturing and commercialization of Horizant during the transition period and as a potential source of supply thereafter; GSK’s ability to fund and conduct clinical trials as agreed between the parties; XenoPort’s ability to satisfy the conditions precedent to the exercise of its option to require GSK to purchase additional shares of its common stock; XenoPort’s ability to establish sales, marketing and distribution capabilities to market Horizant following the transition period, or to enter into arrangements with third parties to do so, including the risk that XenoPort’s failure to establish or contract for these capabilities could interrupt, delay or otherwise adversely affect the commercialization of Horizant; and XenoPort’s cash position and need for additional capital. These and other risk factors are discussed under the heading "Risk Factors" in XenoPort’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed with the Securities and Exchange Commission on October 25, 2012. XenoPort expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
XENOPORT, Regnite and Horizant are registered trademarks of XenoPort, Inc.