Vernalis’ (LON:VER) acquisition of Moxatag, the only approved once-daily formulation of the antibiotic amoxicillin, is a smart move, brokers said today.
In consideration Vernalis has paid owner Pragma an undisclosed up-front cash payment with a further payment with a finished dose product.
Vernalis will also take over its sale and pay Pragma royalties on net sales and further potential sales related milestones.
Approved in the US in 2008, Moxatag is used in the treatment of tonsillitis and other throat infections. It is protected by six Orange Book listed patents, the last of which expires in 2027.
Ian Garland, Vernalis’s chief executive, said Moxatag was another important step towards its transition to a commercial specialty pharmaceutical company.
The drug had not been actively marketed since 2010 and its acquisition enables Vernalis to make better use of the infrastructure put in place with the US launch of cough and cold treatment Tuzistra XR.
Canaccord added it expects Moxatag to be launched in early 2016.
“As antibiotics can be prescribed in combination with cough-cold products during flu season it is a sensible companion product for Tuzistra XR.
“It enables Vernalis to make more efficient use of its sales team, and having two products in the portfolio should make getting sales time to with a doctor simpler.
Buy with a 98p target price said the broker.
Shares rose 2% to 78.5p.