Epix Pharmaceuticals Inc. (Nasdaq:EPIX) has bought back the worldwide commercial rights for its imaging product, blood pool magnetic resonance angiography (MRA) agent, Vasovist, from Bayer Schering Pharma AG. The agreement will expire in March 2009. Vasovist is the only Epix product with sales, and Bayer markets it in 19 countries.
Epix has frequently said that Vasovist is a cash cow that could finance the company's drug development activity, and has hinted that it might sell the product. Bayer has been marked as a potential buyer. Today's announcement is therefore seen as a setback for Epix, which will lose current revenue, royalties on sales, as well as losing its leading candidate to buy the product. The company could have made $70-100 million on a sale of Vasovist. Changing distributors will also affect marketing continuity. Epix's share fell 8.6% by midday to $1.48, giving a market cap of $61 million.
The termination of the Bayer contract generates two scenarios. The optimistic scenario holds that Epix will find a buyer for Vasovist and that it is buying back the rights to the product in order to sell it to a third party. The pessimistic scenario holds that Bayer concluded Epix will not be able to obtain US Food and Drug Administration (FDA) approval for Vasovist, and is therefore foregoing the distribution rights.
Epix has issued a number of upbeat press releases concerning progress in FDA approval for Vasovist, and the company’s share price is taking this probability into account. Epix is also undergoing Phase IIb clinical trials for its treatments for Alzheimer's disease and pulmonary high blood pressure.
Last month, Epix signed an agreement allowing it to raise up to $50 million over three years via committed equity financing facility from Kingsbridge Capital Ltd.
Published by Globes [online], Israel business news - www.globes-online.com - on September 7, 2008
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