AstraZeneca Terminates Valeant's Right On Brodalumab In Europe

(RTTNews) - Valeant Pharmaceuticals International Inc. (VRX, VRX.TO) announced that its affiliate and AstraZeneca (AZN, AZN.L) have amended Valeant's license for brodalumab, an IL-17 receptor monoclonal antibody under regulatory review for patients with moderate-to-severe plaque psoriasis, to terminate Valeant's right to develop and commercialize brodalumab in Europe.

In August 2015, AstraZeneca and Valeant entered into an agreement granting Valeant an exclusive license to develop and commercialize brodalumab globally, other than in Japan and certain other Asian countries.

As per the terms of the amended agreement, Valeant will continue to hold the license to develop and commercialize brodalumab in the U.S, as well as the remainder of the territory outside of Europe.

As consideration for the termination of the European rights, AstraZeneca will pay to Valeant an upfront payment and certain sales-based milestone payments and, in addition, one of the pre-launch milestones payable by Valeant to AstraZeneca under the original license has been reduced.

With the termination of Valeant's licensing rights to brodalumab in Europe, AstraZeneca has entered into an agreement granting LEO Pharma the exclusive rights to develop and commercialize brodalumab in Europe.

LEO Pharma will gain the European rights to brodalumab under similar terms to those agreed with Valeant. Additionally, Amgen will continue to receive a low single-digit inventor royalty.

Brodalumab is an IL-17 receptor monoclonal antibody under regulatory review for patients with moderate-to-severe plaque psoriasis (a skin disease that causes red patches of skin covered with silvery scales) and in development for psoriatic arthritis (inflammation of the joints associated with psoriasis).

AstraZeneca separately said that it has entered into agreements that support its strategic focus on three main therapy areas; Respiratory, Inflammation and Autoimmunity, Cardiovascular and Metabolic disease and Oncology. The agreements include two of AstraZeneca's potential new medicines for dermatitis and psoriasis, allowing the Company to further simplify and sharpen focus on innovative new medicines in the main therapy areas.

AstraZeneca has entered into an agreement with LEO Pharma A/S, a specialist in dermatology care, for the global licence to tralokinumab in skin diseases.

As per the terms of the agreement, LEO Pharma will make an upfront payment to AstraZeneca of $115 million for the exclusive, global rights to tralokinumab in atopic dermatitis and any future additional dermatology indications. LEO Pharma will also pay AstraZeneca up to $1 billion in commercially-related milestones and up to mid-teen tiered percentage royalties on Product Sales.

AstraZeneca will manufacture and supply tralokinumab to LEO Pharma. Tralokinumab is also in Phase III development for patients with severe asthma. AstraZeneca will retain all rights to tralokinumab in respiratory disease and any other indications outside of dermatology.

The agreement with LEO Pharma for tralokinumab is subject to customary closing conditions and is expected to complete in the third quarter of 2016.

The agreements with Valeant and LEO Pharma for brodalumab became effective at signing and incremental payments received from LEO Pharma will be reported as Externalisation Revenue, in line with the prior arrangement.

AstraZeneca noted that the agreements do not impact AstraZeneca's financial guidance for 2016.