On Monday, Pfizer Inc. (NYSE:PFE) announced plans to purchase an attention-deficit/hyperactivity (ADHD) disorder drug developer, NextWave Pharmaceuticals. The deal could carry a $700 million value.
During the second quarter, Pfizer paid $20 million for an option payment of the company, to open up a merger agreement. Upon the deal's close, the company will pay $255 million, and pay an additional $425 million to NextWave from sales milestones.
Pfizer Inc. (NYSE:PFE) said the deal could close in this year's fourth quarter, pending regulatory approval and closing conditions.
In September, the Food and Drug Administration approved NextWave’s new Quillivant XR drug with liquid methylphenidate. This inaugural, once-a-day treatment could begin arriving in pharmacies in January.
The drug has been created to raise attention in ADHD patients.
Different forms of methylphenidate have been added in other ADHD drugs, including Ritalin and Concerta. This liquid formulation has been made for patients who have problems swallowing capsules or pills.
The drug has been created utilizing a drug-delivery technology from its partner, Tris Pharma. NextWave has the only North American commercialization Quillivant XR rights.
The company is also creating, through the same drug, extended release chewable tablets. It is currently in the the advanced-stage for studies, and the company plans to seek approval in 2013.
Albert Bourla, president and general manager in Pfizer's Established Products Business Unit said of the NextWave deal in a press release on Monday, "This agreement demonstrates our focused expansion of the Established Products U.S. brands business to offer a diverse portfolio of high-quality medicines that meet patients' needs. By combining the advantages of Quillivant XR with Pfizer's commercialization expertise, we will be able to provide ADHD patients and their caregivers a new treatment option."
From the acquisition, it will open the door for the Pfizer in the competitive ADHD market. Shire PLC (LN:SHP) and Johnson & Johnson (NYSE:JNJ) have found success through branded drugs, but generic drugs make it a tough marketplace. Through the deal, it will broaden Pfizer's established-products unit, thanks to sales of new, branded formulations for established drugs, reported Dow Jones.
In this busy earnings season, Pfizer Inc. (NYSE:PFE) has not announced their third quarter numbers. They will do so on October 30.
Back on October 5, the Securities and Exchange Commission asked Pfizer to explain its high overseas profits and domestic losses, as 40 percent of its sales occurred in the U.S.
On Monday after the news of the transaction, Pfizer Inc. (NYSE:PFE)'s stock is trading down 1.20 percent and its stock is at $25.45.