Sunovion to acquire Elevation Pharma for up to $430 million

Sunovion Pharmaceuticals, a US subsidiary of Japan’s Dainippon Sumitomo Pharma (TYO: 4506) last week signed a definitive agreement to acquire Elevation Pharmaceuticals, a privately held US biopharmaceutical company specializing in the development of new aerosol therapies for patients with respiratory diseases, for a consideration of as much as $430 million.

The acquisition includes Elevation’s EP-101 product, an inhalation solution of a long-acting muscarinic antagonist (LAMA) bronchodilator that is in Phase IIb clinical trials for the treatment of patients with moderate to severe chronic obstructive pulmonary disease (COPD). EP-101 is in the same class as Boehringer Ingelheim and Pfizer’s Spiriva (tiotropium bromide), which is the top-selling COPD drug. However, Spiriva is not used in a nebulizer, noted Bill Gerhart, Elevation’s founder and chief executive.

Under the terms of the deal, Sunovion will make an upfront payment of $100 million to the shareholders of Elevation on closing of the acquisition of its shares, and thereafter it will make development milestone payments for EP-101 up to $90 million. Furthermore, after the regulatory approval, Sunovion will also make commercial milestone payments up to $210 million. Subsequent milestone payments up to $30 million could occur contingent on the successive development of additional new programs.