VIVUS Acquires Certain Topamax Related Patents from J&J
VIVUS, Inc. (VVUS) announced that it has acquired certain patents related to Topamax (topiramate) from Janssen Pharmaceuticals, Inc., a subsidiary of Johnson & Johnson (JNJ).
Details of the Deal
As per the terms of the agreement, VIVUS acquired certain methods-of-use patents (including U.S. 6,071,537/Shank and U.S. 6,362,220/Cottrell among others) covering Topamax for several indications like obesity, lowering blood pressure and lipid parameters, and reducing blood glucose levels. VIVUS also acquired patent 6,323,236 (McElroy) licensed by Janssen from the University of Cincinnati. VIVUS will now be responsible for all future financial obligations under that license.
In exchange, VIVUS will make a one-time upfront payment to Janssen. Additionally, VIVUS will pay royalties based on net sales from the company’s obesity drug, Qsymia. VIVUS enjoys an option to buy out the royalty at a predetermined price.
Rationale behind the Agreement
We remind investors that on Aug 22, 2014, Janssen had brought a lawsuit against VIVUS in the U.S. District Court for the District of Delaware. Following the acquisition of the patents by VIVUS, Janssen has agreed to dismiss the lawsuit.
We note that topiramate is an ingredient in Qsymia. The FDA cleared Qsymia in Jul 2012 as an adjunct to a healthy diet (low on calories) and increased physical activity for chronic weight management in obese (Body Mass Index, or BMI - 30 or more) or overweight (BMI - 27 or more) adults suffering from at least one weight-related co-morbid condition. In the second quarter of 2014, Qsymia generated net product sales of $11 million as compared to $4.1 million recorded in the first quarter of 2014.
VIVUS, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). Some better-ranked biopharma stocks, worth considering, include Amgen Inc. (AMGN) and Gilead Sciences Inc. (GILD). Both are Zacks Rank #1 (Strong Buy) stocks.
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