UPDATE 1-Avanir Pharma ends R&D pact with AstraZeneca, Novartis
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March 29 (Reuters) - Avanir Pharmaceuticals (AVNR.O) said it has ended two drug-development collaborations with AstraZeneca Plc (AZN.L) and Novartis (NOVN.VX) and is exploring sale of certain assets.
Switzerland-based Novartis, which was developing a treatment for inflammatory diseases with Avanir, will further develop the lead compound. Avanir will receive a milestone payment if the compound reaches the next stage of development.
UK's AstraZeneca would return the drug they were developing for cardiovascular diseases. It would also return all related rights to the company, Avanir said in a statement.
Avanir said it will exit the San Diego research facility later this year and move clinical development and support resources to its headquarters.
The company expects to cut operating expenses to $20 million with these and other cost-saving measures.
It is also evaluating options including the sale of several investigational compounds and the schizophrenia drug, FazaClo. In the first quarter, FazaClo contributed $6.3 million to Avanir's sales.
The goal was to obtain sufficient cash to fund operating expenses over the next two years, including the costs for late-stage trials of Zenvia, Avanir said.
In February, U.S. regulators asked Avanir to hold a fresh clinical trial to test a revised formulation of Zenvia, which treats involuntary emotional expression disorder.
The company had cash and cash equivalents of $14.5 million in the first quarter.
Shares of the company were down more than 4 percent at $1.36 in morning trade on the Nasdaq. (Reporting by Jennifer Robin Raj in Bangalore)
