GlaxoSmithKline gives up on XenoPort Horizant collaboration

UK pharma giant GlaxoSmithKline (LSE: GSK) says that it has reached an agreement with US partner XenoPort (Nasdaq: XNPT) to terminate their collaboration concerning Horizant (gabapentin enacarbil) extended-release tablets, a restless legs syndrome treatment which has failed to live up to sales expectation, and for which GSK had commercialization rights and certain development rights in the USA.

Under the termination and transition deal, GSK is returning Horizant rights to XenoPort and providing certain assistance during the transition period ending April 30, 2013, on mutually agreed terms. The decision to return the asset is aligned with GSK’s ongoing strategy to streamline its portfolio to focus on core franchise opportunities. The agreement also resolves all litigation between the parties, after XenoPort alleged in January that GSK had breached a contractual obligation. XenoPort now acknowledges that GSK fulfilled its contractual obligations on the development, manufacturing and commercialization of Horizant.

The company recorded a non-core non-cash intangible asset write-off for the third quarter of 2012 of £103 million ($165.2 million) pre-tax, and no further one-off charges related to Horizant are expected.