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Alliance Pharma handing back 'Xonvea' rights to Duchesnay
27th Nov 2019 15:00
(Sharecast News) - Alliance Pharma has reached agreement with Duchesnay of Canada to return the UK and EU licensing rights to 'Xonvea', a prescription medicine for the treatment of nausea and vomiting of pregnancy where conservative management has failed, it announced on Wednesday.
The AIM-traded firm had previously indicated that the uptake of Xonvea in the UK was slower than it had originally anticipated, in part due to the ongoing delay in the issuing of updated clinical guidelines.
In addition, it said the competitive landscape for Xonvea in Europe had shifted, making an EU rollout less attractive for Alliance.
Under the terms of the agreement signed with Duchesnay, the £2.0m in milestone payments made to date by Alliance would be repaid to the group, with £0.25m coming in 2019 and the balance in 2020.
Alliance would continue to make Xonvea available to patients in the UK for up to 12 months, to assist Duchesnay with the transition to a new licensee.
Alliance said it expected to incur non-underlying inventory provisions and associated restructuring costs in connection with the return of the Xonvea rights of approximately £1.9m in the year ending 31 December.
It said it anticipated redeploying planned investment in Xonvea in 2020 and beyond into its growth brands, and into the development of its international operations.
As a result, the board said it was not expecting any overall change to underlying trading expectations as a result of this decision.
"Given the current market conditions, we feel that returning the rights to Xonvea to Duchesnay is the right decision for Alliance," said chief executive officer Peter Butterfield.
"It reduces uncertainty and eliminates the need for further investment in the product whilst allowing us to focus our investment on our growing 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."
At 1450 GMT, shares in Alliance Pharma were down 1.22% at 79.32p.
The AIM-traded firm had previously indicated that the uptake of Xonvea in the UK was slower than it had originally anticipated, in part due to the ongoing delay in the issuing of updated clinical guidelines.
In addition, it said the competitive landscape for Xonvea in Europe had shifted, making an EU rollout less attractive for Alliance.
Under the terms of the agreement signed with Duchesnay, the £2.0m in milestone payments made to date by Alliance would be repaid to the group, with £0.25m coming in 2019 and the balance in 2020.
Alliance would continue to make Xonvea available to patients in the UK for up to 12 months, to assist Duchesnay with the transition to a new licensee.
Alliance said it expected to incur non-underlying inventory provisions and associated restructuring costs in connection with the return of the Xonvea rights of approximately £1.9m in the year ending 31 December.
It said it anticipated redeploying planned investment in Xonvea in 2020 and beyond into its growth brands, and into the development of its international operations.
As a result, the board said it was not expecting any overall change to underlying trading expectations as a result of this decision.
"Given the current market conditions, we feel that returning the rights to Xonvea to Duchesnay is the right decision for Alliance," said chief executive officer Peter Butterfield.
"It reduces uncertainty and eliminates the need for further investment in the product whilst allowing us to focus our investment on our growing 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."
At 1450 GMT, shares in Alliance Pharma were down 1.22% at 79.32p.