 has received some good news. Last week the company announced that it signed a collaboration deal with 

The treatment features a novel mechanism of action and is targeted toward the refractory market—patients who require multiple epilepsy treatments. Retigabine saw positive results in Phase III clinical trials, sparking interest in GSK.

"It's another tool that can be added to GSK's arsenal of epilepsy drugs," said Laurie Little, vice president of investor relations at Valeant. "More importantly, it's not just another follow-on product."

GSK will pay Valeant $125 million in cash upfront, with additional milestone payments and royalties for worldwide sales. Valeant will co-commercialize the drug, and share up to 50 percent of net profits in the United States, Canada, Australia, New Zealand, and Puerto Rico, and earn a 20 percent royalty on worldwide sales.


Valeant has been struggling since at least 2005. At the time, the company was doing well with royalty payments from 

, but sales on other products generated a loss. Then-CEO 

 slashed the work force from 12,000 to 3,700, and discontinued a third of its 600 products. This past May, the Aliso Viejo, CA-based specialty drug manufacturer announced that it would cut its work force in half to even out its expense/revenue ratio. It laid off 130 workers in the US and Mexico, and shed another 1,250 jobs after selling its European subsidiaries to Meda AB for nearly $400 million a few weeks back.

"A lot of things have been happening to the company over the past few months—some more painful than others—but the idea is that we got to the point where we were so widespread, trying to be everywhere that we weren't doing very well anywhere," Little told 

"There's not that many drugs coming out of Phase III with good efficacy like Retigabine, and we want to do the most that we can to maximize the potential of the treatment—not just to get it out there," Little said.

In the epilepsy market, Valeant has the rectal gel 

 for emergency seizures in children, and is working on an intranasal version to broaden the appeal for adults. Valeant is not planning on partnering with all of its upcoming drugs, and is considering acquiring drugs and collaborating with smaller pharma companies.

"A lot of companies would try to keep all the profits and do it all themselves, but sometimes they can't," Little said. "This deal gives us the ability to share the risks, and it gives us cash to do other things."

Articles

News Analysis

After a year of layoffs and restructuring, Valeant Pharma scores big with a collaboration deal worth up to $670 million.

GSK to Work with Valeant on Epilepsy Drug

If you can't buy a biopharmaceutical company, you might as well become one. 

 last week announced that it will trim 17 percent of its work force—about 2,000 employees—in order to reestablish the company as specialty drug firm.

 will allow the Belgian-based company to concentrate on central nervous system and immunology treatments—areas it has already been dabbling in. The company plans to reallocate $300 million over the next three years for centers of excellence that will each focus on a target treatment.

 that this plan is not a cost-cutting strategy, but a restructuring to compensate for two blockbuster drugs going off-patent—the allergy drug 

 (cetirizine) and the epilepsy treatment 

"We are a small- to mid-size company, and we think the best recipe is to focus on our strong expertise in epilepsy and immunology," Witte said.

Up until now, UCB was known for its primary care portfolio, including a strong allergy franchise, but it no longer has any PC drugs in the pipeline. "Today, we are 50 percent a primary company, and 50 percent a specialty company," Witte said. "If you look to the future, the feed from the pipeline is 100 percent specialty. Now is the right time to turn the switch and jump from one strategy to another." Key steps in repositioning the company include the purchase of the British biotech 

 in 2004, and the sale of its films business the same year.

UCB said that it won't stop providing support for the primary care drugs it currently sells in the US, but will be shifting R&D to the specialty market. "We are committed to patients and our drugs, but if there's always an end to the life of a drug—it's called patent expiration," Witte said.

When asked if the company is adjusting its strategy to become a more appealing purchase for a Big Pharma, Witte said that UCB is interested in staying independent and acquiring smaller biotech companies to expand its portfolio. In recent years, UCB purchased more than 80 percent of 

 acquiring a wealth of Parkinson's treatments.

"If you are a small company, you have to focus on the right areas where you can change something," Witte said. "Neurology is a huge area with a lot of diseases that are either not treated or not satisfactorily treated, so there is still unmet need. If you invest in these areas, you can really change the lives of many patients."

UCB plans to hire about 400 people worldwide, and reallocate 300 jobs to build its research hubs to work on different treatments, such as its CNS development center in North Carolina. The company expects to implement the entire SHAPE initiative by 2010.

The Belgium-based drug maker is terminating 2,000 jobs and rebranding itself as a biopharm with a focus on CNS and immunology drugs. Pharm Exec gave UCB a call to find out more.

Pharmaceutical Executive-09-04-2008

GSK to Work with Valeant on Epilepsy Drug

UCB Pharma to Rebrand as Specialty Company