GSK Gains Lovaza By Acquiring Reliant For $1.65 Billion

Addition of the triglyceride treatment will complement GSK’s Coreg CR physician base, company tells “The Pink Sheet” DAILY.

GlaxoSmithKline's acquisition of Reliant for $1.65 billion will give the U.K. drug maker access to a growing cardiovascular drug in the U.S., Lovaza (omega-3-acid esters), which will complement its existing CV portfolio, including the hypertension drug Coreg CR .

The company announced plans to acquire the privately held specialty pharma Nov. 21.

"We have in our portfolio Coreg and Coreg CR," the firm told "The Pink Sheet" DAILY. "We do know the physicians and other prescribers, so we have relationships with them already, and we think we can grow upon that as we move forward with Lovaza."

Lovaza could help GSK offset the impact of generic versions of carvedilol, which launched in September (¹ (Also see "Generic Coreg To Launch Immediately Following FDA Approval" - Pink Sheet, 5 Sep, 2007.)).

The addition of Lovaza (formerly Omacor ) will give GSK a sales growth driver in the U.S., particularly critical as sales of its diabetes drug Avandia slip. Lovaza, indicated for the treatment of very high triglyceride levels, competes in the non-statin segment of the cardiovascular market. The drug generated net sales of $206 million for the first nine months of the year, reflecting a 115 percent increase over the first nine months of 2006.

Lovanza launched in 2005, and has grown to achieve a 10 percent market share of total prescriptions in the U.S. non-statin dyslipidemia segment, according to GSK.

"Sales in the non-statin dyslipidemia market totaled approximately $2.2 billion in 2006 and are expected to grow in excess of 20 percent a year," the company added. "GSK believes there is significant opportunity for future growth of Lovaza in this market segment."

In line with expansion plans, Reliant has already been seeking additional indications for Lovaza. In particular, the company has been looking to extend the indications for the drug from patients with very high triglycerides (greater than or equal to 500 mg/dL) to high triglycerides (200 to 499 mg/dL).

In December 2006, the Liberty Corner, N.J., company submitted a response to an FDA "approvable" letter for the use of Lovaza as an adjunct to diet and statin therapy in patients with high triglyceride levels. The firm had received the approvable letter in 2004, at the same time it won approval for the very high triglyceride indication.

While GSK said approximately five million people have triglyceride levels classified as "very high" in the U.S., Reliant has estimated that there are as many as 27 million Americans struggling to control high triglycerides. The response to FDA included data from the Combination of Omacor and Simvastin (COMBOS) trial evaluating the safety and efficacy of the drug as an adjunct to simvastatin in 254 patients (² (Also see "Reliant Submits Response To FDA For Expanded Omacor Indication" - Pink Sheet, 13 Dec, 2006.)).

GSK noted that other potential expansion opportunities for Lovaza include a fixed-dose combination with a statin and possibly an indication as a treatment for atrial fibrillation.

Reliant licensed the rights to Lovaza in the U.S. from Pronova BioPharma, a Norwegian company that will continue to supply the product.

While Lovaza is Reliant's largest and fastest growing product, the company also markets three other drugs: the high blood pressure treatments DynaCirc CR (isradipine) and InnoPran XL (propanolol HCI), as well as Rythmol SR (propafenone) for the treatment of arrhythmia.

Reliant's consolidated sales were $341 million for the nine months ending Sept. 30, 2007, up 62 percent over the same period in 2006. GSK said it expects the acquisition to close by the end of the year.

In connection with the announcement, Alkermes said it would receive up to $174 million from the sale of its stake in Reliant. The company said it expects to receive $166.3 million upon the closing of the transaction and an additional $7.7 million subject to terms and conditions that will remain in effect for a 15-month period following the closing. Alkermes plans to use the proceeds to repurchase shares of common stock.

-Jessica Merrill ([email protected])