Abbott (ABT) to Acquie AP214 from Action Pharma for $110M + Continuing Costs

May 3, 2012 9:31 AM EDT
Abbott (NYSE: ABT) and Action Pharma A/S, a privately owned company, today announced that they have entered into an agreement in which Abbott will acquire AP214 from Action Pharma.

AP214 is in development to prevent acute kidney injury (AKI) associated with major cardiac surgery in patients at increased risk and has further potential in adjacent indications. AP214 is a hormone analogue that targets both systemic inflammation and cellular death (apoptosis) caused by hypoxia (lack of blood flow) that can occur during surgery. In September 2011, Action Pharma announced positive Phase 2b top-line results evaluating the efficacy, safety and tolerability of AP214. Abbott plans to conduct another Phase 2b study, which is expected to begin later this year.

Under the terms of the agreement, Abbott will acquire all global rights to develop and commercialize AP214 for the prevention of AKI and other relevant indications. Abbott will provide a cash payment of $110 million to Action Pharma and will be responsible for funding all future development and commercialization activities regarding AP214. No later milestone payments or royalties will be paid to Action Pharma. Abbott expects to incur a one-time specified item in the second quarter of 2012, related to this payment.

In 2003, Action Pharma in-licensed Zealand Pharma A/S' (NASDAQ OMX Copenhagen: ZEAL) SIP® technology for use with pro-opiomelanocortin derivatives. As part of the agreement between Abbott and Action Pharma, Action Pharma's original licensing agreement with Zealand Pharma regarding the SIP® technology is cancelled, and superseded with a new agreement between Abbott and Zealand Pharma (see separate announcement from Zealand Pharma) regarding the SIP® technology. Upon the closing of the Abbott and Action Pharma transaction, Action Pharma will make a one-time payment to Zealand Pharma of $11 million. Zealand Pharma will also be entitled to a low single-digit royalty on Abbott's future global sales of AP214 (referred to as ZP1480 by Zealand Pharma). Since 2003, Action Pharma has solely developed AP214 to its current clinical status.

Back Bay Life Science Advisors provided strategic advisory services for Action Pharma prior to and throughout the transaction.

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