Forest Laboratories Inc.
) recently signed a collaborative licensing option deal with
Trevena, Inc. for the latter's mid-stage candidate TRV027.
TRV027 is being developed for the treatment of acute
decompensated heart failure (ADHF). Results on the candidate from
a phase IIa study in patients with advanced heart failure with
reduced ejection fraction showed that TRV027 was generally
well-tolerated and demonstrated a beneficial set of hemodynamic
TRV027 is slated to move into a multi-center phase IIb study
in ADHF patients by year end. This study will be funded by
Trevena. Once this study is completed, Forest Labs will have the
option to exclusively license TRV027 on a global basis.
Although detailed financial information was not provided,
Forest Labs will make a $30 million equity investment in Trevena.
Once Forest Labs exercises its option, it may pay up to $430
million on the achievement of development and commercial
milestones. Trevena will also be entitled to royalties. Forest
Labs will also be responsible for the development and
commercialization of TRV027. Trevena's $60 million Series C
financing round will be led by Forest Labs with an investment of
With this deal, Forest Labs is looking to strengthen its
presence in the cardiovascular market and hospital segment. With
currently available treatments not producing meaningful
improvements in patient outcomes, the ADHF market represents
significant commercial potential.
Forest Labs currently carries a Zacks Rank #3 (Hold). The
company is facing tough times with Lexapro losing patent
protection. Namenda will face generic competition in early 2015
putting another $1+ billion at risk. Meanwhile, the performance
of new products, especially Teflaro, has been below expectations.
We also remain concerned about rising expenses. However, we
remain encouraged by the company's progress with its pipeline
Companies that look better-positioned include
Catalyst Pharmaceuticals Partners Inc.
). All three are Zacks Rank #1 (Strong Buy) stocks.
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