NexACT for Apricus, BioTox
SAN DIEGO—Shifting its focus and resources toward generating revenues from commercialization of its drug pipeline—particularly Vitaros—Apricus Biosciences Inc. has sold its wholly owned subsidiary, Bio-Quant Inc., a specialty biotechnology contract research organization (CRO), to BioTox Sciences, a CRO based here.
Under the terms of the agreement, announced July 6, Apricus will receive a minimum of $5 million in upfront and future earn-out payments, with the potential for as much as $20 million over the next 10 years, based on BioTox's currently projected revenues. Additionally, Apricus has retained all NexMed-related research conducted by Bio-Quant.
Founded in 2001, Bio-Quant is one of San Diego's most experienced CROs for non-GLP contract drug discovery and preclinical development services, specializing in oncology, inflammation, immunology and metabolic diseases. Bio-Quant has clients worldwide. Revenues are generated from preclinical contract services and housing services. During 2010, the Bio-Quant CRO business helped advance Apricus' proprietary NexACT technology and increase its product and product candidate portfolio from four products to 13.
With the divestiture of Bio-Quant, Apricus Bio has decided to outsource its primary preclinical CRO work for its NexMed subsidiary and narrow its focus on commercializing its late-stage products.
"While our Bio-Quant subsidiary has been driving revenues over the past year, this divesture represents a key strategic decision for Apricus Bio, as licensing revenues from Vitaros have increased during the first half of 2011, and are currently projected to constitute the majority of our revenue stream for the remainder of 2011," Dr. Bassam Damaj, chairman, president and CEO of the company, said in a news release. "The sale enables us to focus our efforts where we believe we will generate the greatest return on investment—speeding our specialty biopharmaceutical drugs to market."
While Bio-Quant has been instrumental in advancing the uses of NexACT technology and preclinical pipeline, "we have now entered the commercialization stage with our first product and intend to focus our efforts on the generation of revenues from our drug pipeline," Damaj said.
Apricus' top priority is to commercialize Vitaros for the treatment of erectile dysfunction. Vitaros was approved for marketing and sales in Canada in 2010, and the company recently filed for approval in Europe.
Management is in advanced partnering negotiations for Vitaros in Canada and/or Europe, and expects to announce a partnership in the second half of this year, according to Apricus Bio.
Apricus expects that Vitaros will become the majority near-term revenue driver for the company as early as later this year, according to VFC's Stock House, a news service that offers investing opinions and ideas on a variety of different stocks, options and companies. Until now, Bio-Quant has been driving the revenue stream for Apricus.
Meanwhile, the company also announced last month that it filed for Vitaros approval in Switzerland. The move follows a positive review from the Swiss medical authorities in May, and supplements an approval application filed with the European medical authorities earlier this year. The application in Switzerland was separate from the European filing, given that the Swiss regulators do not fall under the EMEA.
"Apricus is also paying close attention to Pfizer's attempts to extend its Viagra patents. Should Pfizer be successful in these attempts, it would reduce the competition on the market for Vitaros," VFC stated. "With near- and mid-term catalysts in play for Apricus, it's worth keeping an eye on developments. Announcing a Canadian partner is key right now."
In addition, Apricus Bio is focused on developing and commercializing the other 12 products and product candidates in its pipeline, including Femprox for female sexual arousal disorder, MycoVa for nail fungus and PrevOnco for liver cancer.
BioTox is a CRO founded in 2007 that focuses primarily on GLP studies and has been interested in expanding its operations in San Diego on the non-GLP side.
"We were actively looking for opportunities to expand our footprint in the discovery CRO area and add more in-vitro and in-vivo disease models to increase the range of services we currently offer to our clients," stated BioTox President Sami Abunadi in a company statement. "Bio-Quant offers a long and successful history in non-GLP preclinical research in areas such as oncology, inflammation, immunology, metabolic diseases and high-throughput screening capabilities. We believe that this transaction will not only be revenue and earnings enhancing and highly valuable to our shareholders, but will also provide both a superior and quicker entry point than the other build or buy options we considered."