Novartis, QLT amend agreement on Visudyne treatment for blindness – Yahoo! Canada News
Novartis, QLT amend agreement on Visudyne treatment for blindness – Yahoo! Canada News
QLT president and chief executive Bob Butchofsky said the change will provide his Vancouver-based company with more revenue, while removing Novartis from any litigation involving Visudyne.
“Previously we had a profit share structure, so the essence of it is that we expect we’ll actually get a higher percentage of revenue from Visudyne as we did under the old structure,” Butchofsky said in an interview Monday.
“We get more money up front, we simplify our relationship with Novartis and we have a lot of benefits from a strategic standpoint that make us a more viable ocular company.”
The change also means Novartis will not be liable for damages stemming from litigation against QLT related to Visudyne.
That includes legal action taken against QLT by the Massachusetts Eye and Ear Infirmary (MEEI), which has been resolved, and the outstanding case with General Hospital Corporation, which operates Massachusetts General Hospital.
Massachusetts General Hospital sued QLT in February seeking higher royalties on sales Visudyne. The hospital claimed the company must pay the same royalties that it pays Massachusetts Eye and Ear Infirmary (MEEI) on Visudyne sales.
QLT currently pays the hospital a 0.5 per cent royalty on Visudyne sales in the U.S. and Canada. MEEI was awarded a 3.01 per cent royalty rate on worldwide sales in a legal action against QLT.
The company has vowed to fight the legal action and Butchofsky the case is expected to go before a jury next summer.
QLT said net worldwide sales of Visudyne were about $2.6 billion last year.
Visudyne was founded by QLT, which then did a deal with Novartis in the mid-90s to distribute and sell the product and giving it worldwide rights.
Visudyne is approved for the treatment of a form of wet age-related macular degeneration, said to be the leading cause of legal blindness in people over the age of 55 in North America and Europe.
As part of the amended deal announced Monday, QLT will have the patent and exclusive U.S. sales and marketing rights to Visudyne. That includes rights to all end-user revenue from Visudyne sales in that country.
Novartis will have marketing and sales rights in all countries outside of the U.S. It will also pay QLT a royalty of 20 per cent of non-U.S. sales until Dec. 31 2014, and 16 per cent after that time until the deal expires at the end of 2019.
QLT said it will continue to manufacture Visudyne and will supply the product at a pre-specified price exclusively to Novartis for distribution outside the U.S. Both companies will be responsible for marketing and sales expenses in their respective territories.
QLT shares closed down 11 cents or nearly three per cent to $3.99 on the Toronto Stock Exchange Monday, with a 52-week range of between $4.86 and $1.57.
Novartis shares were up 92 cents to US$52.03 on the New York Stock Exchange.
Earlier this month, QLT sold its U.S. subsidiary QLT USA Inc. to Tolmar Holding Inc. in a deal worth up to US$230 million. QLT USA’s principal asset is the Eligard line of products for the treatment of prostate cancer. The Eligard line of products is currently manufactured by Tolmar.
Last year it sold its acne gel Aczone for $150 million to Allergan Inc., as well as the building that houses its Vancouver headquarters. It now leases office space in the same location.
QLT has been selling off assets to focus in large part on its Visudyne product.
Visudyne sales fell 28 per cent to $29 million in the second quarter compared to the same period last year, which QLT said was due primarily due to the approval of alternative therapies in Europe.
QLT said total revenues in the second quarter increased eight per cent to $33 million when compared to last year. Second-quarter profit was $8.6 million or 16 cents per share, reversing a year-earlier loss of $7.4 million or 10 cents per share.
The company is expected to report its third-quarter results later this month.
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