Valeant, Kadmon enter strategic agreement for taribavirin and ribavirin

Nov 1 2010

Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) and Kadmon Pharmaceuticals LLC have concluded two strategic agreements for the development and commercialization of taribavirin and the commercial marketing of ribavirin in the treatment of viral diseases, including hepatitis C virus (HCV). Under the terms of the first agreement, Valeant grants Kadmon an exclusive, worldwide license to taribavirin, excluding the territory of Japan, in exchange for an upfront payment of $5 million, other development milestones, and royalty payments in the range of 8-12% of future net sales. Under a separate agreement, Valeant has paid Kadmon $7.5M for exclusive rights to all Kadmon dosage forms of ribavirin, including 200mg, 400mg, and 600mg tablets and capsules, in Poland, Hungary, Czech Republic, Slovakia, Romania and Bulgaria. Valeant will source these products from Kadmon.

J. Michael Pearson, CEO of Valeant Pharmaceuticals, said: "We are pleased to find a strong partner for a compound that we believe has potential to help patients in need of improved treatment. While participating in product development in the overall hepatitis C market no longer fits within our corporate development strategy, ribavirin should be a significant product for our branded generics portfolio in Central Europe."

Samuel D. Waksal, CEO of Kadmon Pharmaceuticals, said: "Kadmon is building upon its commercial platform in hepatitis C through expanded global distribution and the addition of complementary products. Our agreements with Valeant achieve milestones for both of these objectives. Taribavirin completes our ribavirin franchise and will ensure its future sustainability and growth. We have also expanded our global distribution network for ribavirin into markets in which Valeant is a leading provider."

Taribavirin and ribavirin are both nucleoside antimetabolite drugs that interfere with duplication of viral genetic material. Ribavirin is currently indicated, either alone or in combination with other therapies, for hepatitis C infection and other viral infections. Ribasphere® and Ribapak®, proprietary formulations of ribavirin, are currently marketed by Kadmon's Three Rivers Pharmaceuticals division for the treatment of hepatitis C in territories around the world.

Taribavirin is a prodrug of ribavirin currently in development for the treatment of chronic hepatitis C. Data from a Phase IIb weight-based dosing study presented at the American Association for the Study of Liver Disease 2009 Annual Meeting demonstrated similar efficacy to ribavirin but with significantly less anemia, which is the main treatment-limiting toxicity associated with ribavirin.