RedHill Biopharma buys gastro drug

RedHill Biopharma, photo: Einat Levron

The company plans on using the same marketing network for both the purchased drug and its own drug.

RedHill Biopharma Ltd. (Nasdaq: RDHL); TASE: RDHL), which specializes in developing drugs for the digestive tract, has announced its acquisition of a medical food product for treatment of chronic diarrhea that has already been approved for marketing, and which is already generating revenue. The product is the second acquired by Redhill after having already reached the commercial stage. The company explained that the goal is to form an integrated marketing apparatus for these products that will be able to handle products developed by the company itself after they are approved for marketing. The RedHill share price did not change on the Tel Aviv Stock Exchange (TASE) or Nasdaq following the announcement, but is down 3.27% today, leaving the company with a NIS 627 million market cap.

EnteraGam, the product involved, is a prescription drug for controlling chronic diarrhea. Registered in 2016, its revenue has exceeded $5 million. The drug was also previously considered for the treatment of other diseases, such as irritable bowel syndrome (IBS), the main symptom of which is diarrhea; inflammatory diseases; and unwanted weight loss resulting from AIDS.

According to RedHill senior VP business development and licensing Adi Frish, Entera, the parent company of the product, preferred to market it using the marketing apparatus being assembled by RedHill, even though it has independently reached $5 million in revenue, because it has only one product, while RedHill is working towards an entire portfolio of digestive tract medical products several years from now.

RedHill did not pay anything for the franchise, but will share the revenue with Entera. The other product for which RedHill acquired marketing rights in the US, under similar terms, is Donnatal, a drug for the treatment of IBS and intestinal inflammations. This product has posted $60 million in revenue worldwide. RedHill will market it in the US together with Concordia, the company from which Redhill acquired the rights. Concordia will continue to be responsible for producing and supplying the product.

Important events in the coming months

RedHill says that it will launch these two products in mid-2017. Frish explains that RedHill will invest several million dollars in assembling a marketing system for the two products, but also expects the revenue to be on a similar scale.

In the near future, RedHill is expecting several significant events, including the results of a Phase III trial of Bekinda, a drug for the treatment of intestinal inflammation, in the current quarter; the conclusion of a Phase II trial of the same drug for the treatment of IBS by mid-year; the results of a check by the consultant committee for a trial of the RHB-104 drug for treatment of Crohn's Disease during the second half of 2017 (the company hopes to be allowed to terminate the trials, following exceptionally good results); and the beginning of a confirmatory Phase III trial for RHB-105, a drug for treating H. pylori infections (ulcers), following good results in an earlier Phase III trials of the drug.

It should be noted that the opposite can also happen with RHB-104, with the committee recommending the termination of the trials because the chances of its success are poor.

Published by Globes [online], Israel Business News - www.globes-online.com - on April 6, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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RedHill Biopharma, photo: Einat Levron
RedHill Biopharma, photo: Einat Levron
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