Mayne Pharma to acquire Kapanol in Australia from GlaxoSmithKline for up to A$14.0 million

Australia’s Mayne Pharma Group (ASX: MYX) has entered into a binding agreement to acquire Kapanol and related assets in Australia from UK pharma giant GlaxoSmithKline (LSE: GSK), for a total consideration of up to A$14 million ($14.7 million), made up of an upfront cash payment of A$10.125 million and up to A$0.5 million for inventory at completion of the acquisition on February 1, 2013; plus A$3.375 million payable on February 1, 2014.

Under the terms of the deal, Mayne will acquire the Kapanol trade mark, marketing authorizations, product dossier, technical data and product inventory. The existing licence arrangement between Mayne and GSK will be amended so that Mayne acquires the rights to sell Kapanol in Australia.

Kapanol is a modified release oral opioid used for the relief of chronic, moderate to severe pain. The drug represents 6% of the A$90 million modified release oral opioid analgesic market which is growing at 5% per annum driven by strong underlying fundamentals such as an aging population, increasing incidence of cancer and increased use in non-malignant chronic pain, said Mayne. For the 12 months ended October 31, 2012, Kapanol generated gross revenue of A$5.5 million in Australia.