UPDATE 3-Lundbeck buys European rights to Alzheimer's drug
(Adds chairman's comments, recasts lead)
COPENHAGEN, May 22 (Reuters) - Danish pharmaceutical group Lundbeck (LUN.CO) said on Thursday it had acquired the European rights to Myriad Genetics' Flurizan, an experimental Alzheimer's drug it hopes can become the company's next blockbuster.
Lundbeck will pay Myriad (MYGN.O) an initial $100 million for the drug, which is in the third and final trial phase, and up to $250 million in connection with regulatory approvals, as well as royalties. The company said a Phase II study had shown Flurizan may delay disability in Alzheimer's patients.
"If the product confirms the Phase II data... I'd be extremely disappointed if this doesn't become Lundbeck's biggest product ever," Lundbeck Chairman Per Wold-Olsen said.
Lundbeck currently generates most of its revenue from Cipralex, sold in the United States as Lexapro. Patents on the drug, which had worldwide sales of 6.7 billion Danish crowns ($1.42 billion) last year, expire in major markets in 2012-2014, and Lundbeck has said it would try to license one or two new compounds this year to make up for the expected revenue loss.
"This drug has sales potential of up to $1.5 billion a year, but it really depends on the Phase III data," said Dresdner Kleinwort analyst Benjamin Yeoh. "I think the price is high but necessary. $100 million upfront is expensive for a Phase II drug and the royalty also seems expensive, but then again they need something urgently."
Lundbeck already has an Alzheimer's drug, Ebixa, with sales of 1.7 billion Danish crowns ($359.2 million) last year worldwide. Ebixa had 15.7 percent of the European market for Alzheimer's drugs by the end of February this year.
The company said a Flurizan Phase III trial with nearly 1,700 patients has been completed in the United States, with results scheduled for release next month. Results from a global Phase III trial with 840 patients will be available toward the end of the year.
The drug is expected to be submitted for regulatory approval in the first half of next year.
By 1200 GMT, Lundbeck shares rose 0.6 percent at 127.50 crowns, while Copenhagen's top 20 index eased 1.5 percent.
Lundbeck said it decided to stop buying back its shares after the Flurizan deal and added that it would continue to pursue other drugs for licensing and acquisition. (Additional reporting by Rasmus Nord Jorgensen; Editing by Louise Ireland and Sophie Walker)
