Horizon Pharma Agrees To Buy U.S. Rights To Vimovo - Quick Facts

(RTTNews) - Horizon Pharma, Inc. (HZNP) Tuesday said it has entered into an agreement to acquire from AstraZeneca AB the U.S. rights to Vimovo (naproxen/esomeprazole magnesium) delayed-release tablets, further expanding its focus on key primary care physician targets in the U.S.

The company will make a one-time upfront payment of $35 million to AstraZeneca for the U.S. rights to Vimovo.

Vimovo is approved in the U.S. to relieve the signs and symptoms of osteoarthritis, rheumatoid arthritis and ankylosing spondylitis and to decrease the risk of stomach ulcers in patients at risk of developing them from treatment with NSAIDs. AstraZeneca will retain ex-U.S. rights to Vimovo.

The firm will also pay a 10 percent royalty on net sales to Pozen, subject to annual minimum royalties of $5 million in 2014 and $7.5 million each year thereafter, provided that the patents owned by Pozen which cover Vimovo remain in effect and no generic forms of Vimovo are on the market.

For the remainder of the fourth quarter, AstraZeneca will continue to distribute and book revenues for Vimovo and Horizon will receive any related net profits from AstraZeneca.

Horizon expects that this transaction will significantly increase its revenues and accelerate the company to profitable operations.

The deal is expected to be accretive to non GAAP net income in 2014.

Further, Horizon said it expects 2014 full-year net revenue of $190 to $205 million, while 5 analysts polled by Thomson Reuters have a consensus estimate for revenues of $157.55 million. The company expects to be profitable in 2014 on a non GAAP basis.