The Medicines Company (MDCO) recently entered into an agreement with Dutch company, ProFibrix B.V., under which it will receive an option to purchase all the outstanding capital stock of the latter. The option may be exercised by The Medicines Co. once it reviews results from an ongoing phase III study being conducted with ProFibrix’ lead biologic, Fibrocaps.
Terms of the Deal
Under the agreement, The Medicines Co. will make an upfront option payment of $10 million to ProFibrix. Once the company decides to exercise its option, it will make an uprfornt payment of $90 million and purchase all the outstanding capital stock of ProFibrix. Additional payments of up to $140 million may be made on the achievement of US and EU regulatory approvals and sales milestones. However, if The Medicines Co. opts to terminate the deal, it may do so without having any further obligations.
The deal depends on the outcome of the ongoing phase III study, FINISH-3, being conducted with Fibrocaps, which is a dry powder topical formulation of fibrinogen and thrombin. The candidate is being developed to halt bleeding during surgery.
FINISH-3 is being conducted in surgical patients with mild to moderate surgical bleeding with results due in the third quarter of 2013. Positive results from this study would support regulatory filings in the US and the EU.
Once the phase III results are out, The Medicines Co. will review the same and decide whether it would like to exercise its option.
Fibrocaps, if successfully developed, may have an advantage over existing products, as it can be used at room temperature and does not require thawing before use. The Medicines Co. said that phase II results have shown Fibrocaps to be highly effective as a hemostatic agent.
This deal makes strategic sense – the successful development of Fibrocaps will allow The Medicines Co. to strengthen its position in the hemostasis market. Moreover, the company will be able to leverage its activities in surgery centers in the US and speed up its entry in Europe.
We note that The Medicines Co. has an agreement with Bristol-Myers Squibb (BMY) for marketing Recothrom, an FDA approved recombinant thrombin used as a topical hemostat to control non-arterial bleeding during surgical procedures.
The Medicines Co. currently carries a Zacks Rank #3 (Hold). At present, companies like Biogen Idec (BIIB) and Anika Therapeutics (ANIK) look well-positioned with both being Zacks Rank #1 (Strong Buy) stocks.
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