Several pharma/biotech companies collaborate for the development
and commercialization of products. These collaborations make sense
as they allow the companies to bring together their expertise,
technical knowhow and resources. Where financial terms are
concerned, these agreements are typically structured to include an
upfront payment and additional payments on the achievement of
milestones besides royalties.
Earlier this week,
Supernus Pharmaceuticals, Inc.
) announced that it has received a milestone payment of $2 million
United Therapeutics Corp.
) for the launch of Orenitram (treprostinil) extended-release
tablets. Supernus will also receive royalties on net sales of
Orenitram and additional payments on the achievement of certain
We note that Orenitram was developed by United Therapeutics
using Supernus' patented technology platform. It was approved in
Dec 2013 for the treatment of pulmonary arterial hypertension (PAH)
patients (in World Health Organization (WHO) Group I) for improving
their exercise capacity. The product was launched in Apr 2014.
We note that subcutaneous and intravenous formulations of
Orenitram are already available under the trade name Remodulin for
the treatment of PAH.
Orenitram has orphan drug status in the EU for the treatment of
PAH. An application for orphan drug designation for Orenitram is
under the U.S. Food and Drug Administration's (FDA) review.
The milestone payment of $2 million received by Supernus will add
to the company's topline. In 2014, Supernus expects revenues in the
range of $75 million−$85 million. The Zacks Consensus Estimate for
revenues of $80 million is within this guidance range.
Supernus carries a Zacks Rank #3 (Hold). Some better-ranked stocks
in the healthcare sector include
). While Mallinckrodt carries a Zacks Rank #1 (Strong Buy), Akorn
holds a Zacks Rank #2 (Buy).
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