Pfizer buys King Pharmaceuticals for $3.6 billion
Pfizer announced this morning that it will acquire King Pharmaceuticals for $3.6 billion, the company's largest acquisition post-Wyeth. Known primarily for its tamper-resistant formulations of opioid analgesics, King Pharmaceuticals will expand Pfizer's portfolio in the pain category, adding Embeda, Avinza and the Flector Patch to Pfizer's Lyrica and Celebrex products.
Tennessee-based King also comes with a device business – Meridian – which makes the EpiPen emergency drug delivery system (for life-threatening allergic reactions caused by insect bites, food, medications and other causes), and an animal health business with net revenues of $85 million for the second quarter of 2010, according to a King financial report. Meridian brought in $83 million during the second quarter, an increase of $11 million year-over-year, despite “significantly lower” sales to the US government, Joe Squicciarino, King's CFO, said in the report.
Embeda (morphine sulfate and naltrexone hydrochloride) was approved in August of 2009, and came to King through an acquisition of Alpharma, which is also the source of King's animal health business and its Flector Patch, an NSAID patch for acute pain. Embeda net sales were up by $6 million in the second quarter, to $15 million, compared with the first quarter, according to the report. Net sales for all of King's branded pharmaceutical products during the second quarter were $162 million, with an additional $26 million in royalties from CorePharma's authorized generic version of King's Skelaxin (metaxalone), a muscle relaxant that lost patent protection this year. Skelaxin's dive off the patent cliff brought sales down by nearly $100 million – from $102 million in 2Q 2009 to $5 million in 2Q 2010, according to the report.
For King's currently approved pain products, Pfizer will “map in [King's] primary care sales forces, but they will focus on pain specialists,” said Joan Campion, a Pfizer spokesperson. King sales reps will sell their portfolio of pain products, as well as Pfizer's Lyrica and Celebrex, and “Pfizer's traditional sales force will sell the Flector Patch, as well as Lyrica and Celebrex,” Campion said. King hired a new chief commercial officer in August, Jeffrey Bailey, who previously managed pain products and was responsible for launching new pain medicines at Johnson & Johnson. A spokesperson at King Pharmaceuticals was not immediately available for comment.
King also brings Avinza (morphine sulfate extended-release capsules) to Pfizer, another reformulated pain drug (2Q sales were $25 million), and is currently seeking approval for Remoxy, an abuse resistant version of oxycodone. Remoxy, which is manufactured by Pain Therapeutics and will be commercialized by King (upon approval), received a complete response from FDA in December of 2008. Brian Markson, King's chairman, president and CEO, told analysts in August that the company would resubmit its Remoxy NDA “late fourth quarter .” Tim Anderson, an analyst at Bernstein, said in a report on Pfizer's acquisition that Remoxy, King's “most important pain product…could sell around $500 million or so within five years.”
King also hopes to gain FDA approval for a separate oxycodone reformulation, Acurox (oxycodone HCI/niacin), which was rejected by an FDA panel in April. King and its partner on Acurox, Acura Pharmaceuticals, are planning to resubmit Acurox to FDA during the first quarter of 2011, without the niacin ingredient. Pfizer hit a snare of its own with one of its experimental products for pain – tanezumab – after some patients in clinical trials over the summer experienced a worsening of their condition after taking the drug, according to a Pfizer statement.