P&G licenses reflux drug

Procter & Gamble in-licensed a drug for treating gastrointestinal disorders, the first since its license-and-acquisitions business model took effect earlier this year. Under the deal, P&G will make an upfront payment of $25 million to the compound’s developer, ARYx Therapeutics. Payments could reach $435 million over the life of the project, including $250 million before the drug—dubbed ATI-7505—is sold. The drug is in phase II clinical trials. P&G once sold another heartburn drug, blockbuster Propulsid (cisapride), but withdrew it in 2000 due to concerns over possible heart problems. ATI-7505, the firms say, was designed to retain Propulsid’s mechanism of action but without side effects. The licensing deal with ARYx is the first since P&G announced in February it had decided to acquire new prescription drugs rather than invent them internally. P&G is honing in on three areas: musculoskeletal, women’s health and gastrointestinal. Drugs it sells in those areas are Actonel for osteoporosis, Enablex for postmenopausal conditions and Asacol for ulcerative colitis.