Lundbeck divests three branded injectables to Akorn

Danish CNS drug specialist Lundbeck (LUND: DC) says it has entered into an agreement with USA-based niche generic drugmaker Akorn (Nasdaq: AKRX) to sell a portfolio of three off-patent, branded, hospital-based injectables products comprising Nembutal (pentobarbital sodium injection, USP), Cogentin (benztropine mesylate injection) and Intravenous Sodium Diuril (chlorothiazide sodium).

This transaction is part of Lundbeck's long-term strategy to focus on newer, strategic products in its portfolio. As part of the agreement, Akorn will continue with Lundbeck's restricted distribution program for Nembutal, which was implemented to restrict the use of the product in the USA, the Danish firm noted. Lundbeck, like other companies whose drugs took on an unintended role in US executions, had asked states to stop using pentobarbital for capital punishment.

Under the terms of the deal, Akorn will make an upfront payment of $45 million and a subsequent milestone payment of $15 million in cash after three years. The initial purchase price and the subsequent milestone payment are subject to a reduction if certain sales targets are not met in the first three years and the subsequent three years post closing, notes Akorn.