Valeant, Kadmon Enter Antiviral Pact

Valeant Pharmaceuticals and Kadmon Pharmaceuticals have entered two strategic agreements for the development and commercialization of taribavirin and the marketing of ribavirin in the treatment of viral diseases, including hepatitis C virus (HCV). Under the first agreement, Kadmon has an exclusive, worldwide license to taribavirin, excluding Japan, in exchange for an upfront payment of $5 million, development milestones, and royalties on future net sales. Under a separate agreement, Valeant paid Kadmon $7.5 million for exclusive rights to all dosage forms of ribavirin tablets and capsules, in Poland, Hungary, Czech Republic, Slovakia, Romania and Bulgaria. Valeant will source these products from Kadmon.

J. Michael Pearson, chief executive officer of Valeant Pharmaceuticals, said, “We are pleased to find a strong partner for a compound that we believe has potential to help patients in need of improved treatment. While participating in product development in the overall hepatitis C market no longer fits within our corporate development strategy, ribavirin should be a significant product for our branded generics portfolio in Central Europe.”

Samuel D. Waksal, chief executive officer of Kadmon Pharmaceuticals, added, “Kadmon is building upon its commercial platform in hepatitis C through expanded global distribution and the addition of complementary products. Our agreements with Valeant achieve milestones for both of these objectives. Taribavirin completes our ribavirin franchise and will ensure its future sustainability and growth. We have also expanded our global distribution network for ribavirin into markets in which Valeant is a leading provider.” Mr. Waksal previously served as chief executive officer of ImClone, before serving seven years and three months in prison after pleading guilty to charges of insider trading. Those charges were leveled after he informed friends and family that the FDA planned to reject the flawed application for Erbitux; the rejection led to an 80% drop in ImClone’s share price. He is permanently banned from serving on the board of any publicly held company.

Taribavirin and ribavirin are nucleoside antimetabolite drugs that interfere with duplication of viral genetic material. Ribavirin is currently indicated, either alone or in combination with other therapies, for hepatitis C infection and other viral infections. Ribasphere and Ribapak, formulations of ribavirin are currently marketed by Kadmon’s Three Rivers Pharmaceuticals division for the treatment of hepatitis C in territories around the world.