Reckitt Benckiser Pharmaceuticals Inc., a wholly owned subsidiary of Reckitt Benckiser Group plc (OTN: RBGPF), and XenoPort, Inc. (NASDAQ: XNPT) announced yesterday that they have entered into a license agreement that will grant Reckitt rights for the development and commercialization of XenoPort’s promising oral treatment for alcohol use disorders, a condition affecting more than 140 million people worldwide.
Under the terms of the agreement, Reckitt will receive exclusive rights to develop and commercialize arbaclofen placarbil worldwide for all indications, subject to certain rights by XenoPort to negotiate with Reckitt Benckiser Pharmaceuticals on collaborations for non-addiction indications.
According to the World Health Organization, alcohol use disorders are a global public health issue,with an annual economic burden of $224 billion in the United States alone, and alcoholism is directly responsible for more than 2.5 million deaths each year and is a causal factor in over 60 other major types of disease. See Global status report on alcohol and health. While anything can happen during clinical trials that can derail even the most promising drug or therapy, the potential market is enormous. If the drug proceeds through to market it should have little difficulty achieving blockbuster status, but many hurdles obviously still remain.
The next step on the arduous path to market will be to advance arbaclofen placarbil into a Phase IIB proof-of-concept study for the treatment of alcohol use disorders. Arbaclofen placarbil will be tested for its ability to suppress alcohol cravings, reduce alcohol intake and to possibly facilitate maintenance of abstinence in alcohol dependent people. So far in prior clinical trials, arbaclofen placarbil has demonstrated attributes that may enable convenient dosing and good tolerability.
While in many cases the terms of agreements of this type are confidential, we know quite a bit about the financial terms of the agreement. In exchange for these rights and upon the agreement becoming effective, XenoPort will receive an up-front, non-refundable cash payment of $20 million. XenoPort will also receive another $5 million upon the transfer of certain technology and materials to Reckitt Benckiser Pharmaceuticals. XenoPort also will be eligible to receive aggregate cash payments of up to $70 million upon the achievement by Reckitt Benckiser Pharmaceuticals of certain development and regulatory milestones, as well as up to $50 million for commercial milestones. Additionally, XenoPort is entitled to receive tiered double-digit royalty payments up to the mid-teens on a percentage basis on potential future net sales of arbaclofen placarbil in the United States and high single-digit royalty payments on potential future net sales outside the United States.
The agreement is subject to review by the U.S. Government under the Hart-Scott-Rodino Antitrust Improvements Act, as amended, and will become effective only after clearing review.
“Reckitt Benckiser Pharmaceuticals recognizes that there is a tremendous need for more effective, well-tolerated treatment options among the growing patient population with alcohol use disorders, and we believe arbaclofen placarbil is a natural fit for our growing addiction treatment pipeline,” said Shaun Thaxter, CEO, Reckitt Benckiser Pharmaceuticals Inc. “Over the past decade, we have demonstrated our leadership in the challenging addiction space by helping patients struggling with the chronic disease of opioid dependence access treatment. We are proud to focus our clinical development experience along with our global regulatory and go-to-market infrastructure to potentially bring arbaclofen placarbil to market as a new choice for the many patients with alcohol use disorderand the healthcare professionals who treat them.”
“We believe that Reckitt Benckiser Pharmaceuticals will be an excellent partner for the further development of arbaclofen placarbil, given their track record of success in the treatment of addiction disorders. XenoPort has completed a substantial amount of preclinical, clinical pharmacology and manufacturing work and has dosed over 1,300 human subjects with arbaclofen placarbil in various clinical trials,” said Ronald W. Barrett, Ph.D., CEO, XenoPort, Inc. “We are very pleased to leverage this work with a partner that now has an exciting opportunity to develop a potential new effective, safe and conveniently dosed medicine that could address an important medical and societal problem.”