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Egalet Teams with Shionogi in $425M Deal

Partners will develop abuse-resistant pain pills.


The Burrill Report

Privately held specialty pharmaceutical Egalet has developed drug delivery technology aimed at stopping such abuse. It has teamed with Japanese pharmaceutical Shionogi in a collaborative deal valued at $425 million to develop and commercialize multiple abuse-deterrent oral hydrocodone opioid products using Egalet’s proprietary technology. Currently there are no such products on the market.

Hydrocodone opioids, such as Vicodin, can be highly addictive and their rate of use has been rising steadily. Abuse of prescription opioids has become a national epidemic in the United States. A study funded by the National Institutes of Health estimates that approximately 8 percent of the nation's 12th-graders abused hydrocodone in 2010.

Shionogi will pay Egalet $10 million upfront and has agreed to purchase $15 million in common stock in a private placement to close concurrently with Egalet’s recently filed initial public offering. Egalet is also eligible for development and regulatory milestones that could exceed $300 million if more than one product is approved, and another $100 million in sales-based milestones, plus royalties. Shionogi will fund all development of the products and will also have exclusive global rights to commercialize the resulting products.

“We believe this collaboration provides validation for our proprietary abuse-deterrent drug delivery platform and positions us to capitalize on our technology, both through the products to be developed under the collaboration and by enabling us to develop additional opioid candidates utilizing our platform technology,” says Bob Radie, president and CEO of Egalet.

Egalet’s abuse-deterrent technology includes using a hard matrix that is difficult to crush, grind, or dissolve and also controls the release of active ingredient in the gastrointestinal tract. It has developed a pipeline of clinical-stage, opioid-based product candidates in tablet form that includes an abuse-deterrent, extended-release, oral morphine formulation and an abuse-deterrent, extended-release, oral oxycodone formulation.

November 29, 2013

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