Daiichi Sankyo has elected to terminate its existing agreement with Charleston Laboratories to forgo the development and commercialisation of hydrocodone products in the US for the treatment of moderate-to-severe acute pain and to reduce opioid-induced nausea and vomiting (OINV).
The agreement between the two companies was originally signed in 2014.
As part of the termination, Daiichi Sankyo will stop executing any development and commercialisation rights for Charleston Laboratories' hydrocodone products, which include CL-108 (hydrocodone, acetaminophen and promethazine).
The company will return all of its rights to those products to Charleston Laboratories and incur a loss of approximately $250m in the second quarter consolidated financial result for fiscal year (FY) 2017 (IFRS), reflecting payments made to Charleston Laboratories under the 2014 agreement.
Daiichi Sankyo US subsidiary Administrative and Commercial president Ken Keller said: “During a recent portfolio and US market review, Daiichi Sankyo made the strategic decision to refocus our commercial efforts on our current product line in the US pain franchise, as well as other molecules in our pipeline.”
An updated consolidated forecast for FY2017, including the impairment loss, will be reported in the second quarter earnings call disclosure.
In August 2014, Daiichi Sankyo and Charleston Laboratories entered a strategic collaboration for the development and marketing of the hydrocodone products in the US through its wholly owned subsidiary, LOCL Pharma.
Under the deal, Charleston Laboratories was slated to receive a payment of $200m, along with up to an additional $450m in milestone payments.
As part of the collaboration, the US subsidiary of Daiichi Sankyo was given marketing rights of CL-108 in the US, while Charleston Laboratories was responsible for carrying out the manufacturing activities for the product.