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(Alliance News) - Alliance Pharma PLC said Wednesday it agreed to return UK & European Union licensing rights to a pregnancy sickness treatment after uptake of the drug was slower than expected.
Alliance Pharma reached a deal with Duchesnay Inc of Canada to return the UK and EU rights to Xonvea to Duchesnay after uptake was "slower" than it originally forecast, "in part due to the ongoing delay in the issuing of updated clinical guidelines".
In addition, Alliance Pharma added that the competitive landscape in Europe for Xonvea - which treats nausea and vomiting during pregnancy - had made an EU rollout "less attractive".
As part of the deal with Duchesnay, Alliance Pharma will receive back the GBP2.0 million milestone payments it has already paid to Duchesnay. This will be through a GBP250,000 payment in 2019 and the remainder in 2020.
Until a new licensee has been appointed, Alliance Pharma will continue to make Xonvea available to patients in the UK for up to a year.
All planned investment in Xonvea in 2020 will now be directed towards the growth brands at Alliance Pharma. The firm expects to incur a GBP1.9 million charge in 2019 related to the decision, but underlying trading expectations remain unchanged.
In 2018, Alliance Pharma generated GBP22.8 million in pretax profit on revenue of GBP118.2 million.
"Given the current market conditions, we feel that returning the rights to Xonvea to Duchesnay is the right decision for Alliance," Chief Executive Officer Peter Butterfield said. "It reduces uncertainty and eliminates the need for further investment in the product whilst allowing us to focus our investment on our growing OTC (over-the-counter) portfolio and the expansion of our international operations."
"We remain proud of our achievements in bringing Xonvea to market in the UK and starting the registration process in Europe; we will ensure that the product continues to remain available to patients and clinicians in the UK for up to 12 months whilst a new licensee is appointed," Butterfield added.
Shares in Chippenham-based Alliance Pharma were 0.9% lower at 79.60 pence in London on Wednesday.
By Ahren Lester; ahrenlester@alliancenews.com
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