RedHill plans growth, more cash with Irish deal

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A Raleigh drugmaker pushing ahead with development of its drug portfolio has signed a series of deals with an Irish drug company that will bring it immediate new capital to further along its clinical work.

On Thursday, Raleigh’s RedHill Biopharma announced a deal with Cosmo Pharmaceuticals for an exclusive licensing and manufacturing agreement for multiple products.

Under the terms of the proposed deal, which RedHill says is expected to “close in the coming weeks,” the companies will co-develop a novel therapy for the eradication of H. pylori infection.

Cosmo would pay RedHill $7 million upon signing the agreement, as well as an additional $2 million upon approval of the drug in Europe.

Cosmo will receive the exclusive European rights to the drug. Once approved, Cosmo will pay RedHill 30 percent royalties on sales of the drug.

According to the terms of the deal, the companies will conduct clinical trials of the drug jointly, aiming at simultaneous regulatory approvals in the U.S. and Europe with Cosmo paying 30 percent of the costs of the trial and RedHill footing the remainder.

In addition to the new drug, Cosmo will also help finance RedHill’s planned Phase 3 trial of its RHB-204 drug through a $5 million payment on signing and an additional $7 million based on development milestones.

RHB-204 is a treatment for pulmonary nontuberculous mycobacteria infections.

In exchange for the capital, Cosmo will be entitled to 15 percent in royalties.

Finally, Cosmo will also become the exclusive worldwide manufacturer for Movantik, which Redhill just recently acquired from AstraZeneca, and RHB-204. According to Redhill, “Cosmo will be paid €5.5 million for tech transfer, formulation and development work with respect of these products.”

“We are very pleased to expand our strategic partnership with Cosmo Pharmaceuticals,” said RedHill CEO Dror Ben-Asher in a statement.

“This will accelerate the planned pivotal Phase 3 study with RHB-204 in pulmonary NTM infections and the development of a next-generation H. pylori treatment.

Importantly, Cosmo has a proven track record of formulating, developing and manufacturing novel therapies for multiple countries thus ensuring high quality supply.”

In addition to the deal, RedHill also disclosed its second quarter results on Thursday morning. According to its filing with the U.S. Securities and Exchange Commission, the company saw net revenue of about $21 million over the quarter, up from just $1.1 million in the first quarter of the year and a result of its increased commercial presence during the year, including the launch of its lead drug, Talicia.

As of Aug. 12, the company reported cash and cash equivalents of $56 million, not including the anticipated funding from the Cosmo deal.

“This has been a standout period for RedHill with the acquisition of Movantik from AstraZeneca and the launch of Talicia,” Ben-Asher said.

“In summary, with three FDA-approved products being promoted, commercial operations largely resumed, growing revenues, and our late-stage development programs progressing as planned, we are well-positioned for continued and rapid growth, with a number of near- and long-term growth drivers.”

Original Article Source: Triangle Business Journal