Santhera Enters into License Agreement with Chiesi Group for Raxone in LHON Valued at up to CHF 105 Million

Santhera Pharmaceuticals announces that it has entered into an exclusive license agreement with Chiesi Farmaceutici, an international research-focused healthcare group (Chiesi Group), under which Chiesi Group will in-license Raxone for the treatment of LHON for a total consideration of up to CHF 105 million (EUR 93 million), comprising an upfront cash payment of CHF 50 million (EUR 44 million) and near- to mid-term sales milestone payments of up to CHF 55 million (EUR 49 million).

Chiesi Group is in-licensing the rights to Raxone in LHON and all other ophthalmological indications worldwide except the US and Canada, where Santhera retains rights. In a second step, following the completion of certain reimbursement and post-regulatory commitments on the part of Santhera, Chiesi Group has the option to fully acquire Santhera’s Raxone business. The transaction enables Santhera to focus on the business areas core to its long-term growth strategy by advancing its clinical-stage neuromuscular and pulmonary programs.

“Since the approval in 2015 we have successfully launched Raxone in Europe and reported strong year-on-year sales increases. In the past eighteen months we also strategically diversified our pipeline. This license agreement for Raxone in LHON, our sole neuro-ophthalmology asset, will allow us to create significant value for our shareholders as it provides financial resources enabling us to focus on delivering innovation to patients with neuromuscular and pulmonary diseases of great unmet medical need,” said Thomas Meier, PhD, Chief Executive Officer of Santhera.

“We have built a strong portfolio in neuromuscular and pulmonary rare disease areas with last year’s acquisition of option-rights to vamorolone for Duchenne muscular dystrophy (DMD) and other inflammatory diseases, and the acquisition of POL6014 for cystic fibrosis and other pulmonary disorders. Major upcoming inflection points will be the decision on our marketing authorization application for Puldysa® in DMD in Europe, which we plan to submit shortly. Another milestone expected for next year are results of the pivotal trial with vamorolone in DMD. With positive results and upon exercising the option to acquire this asset, we could seek regulatory approvals in the US and Europe. We are delighted to be working with Chiesi Group, a global company with an established commercial infrastructure and a strong reputation for delivering innovation in rare diseases and areas of special care, including ophthalmology. We will work closely with Chiesi Group to ensure a smooth handover of the Raxone business and a seamless supply of this only approved medication for the treatment of this devastating form of vision loss to patients in need.”

“Chiesi Group has a strong commitment in the orphan diseases area, bringing innovative treatments forward to patients affected by rare or ultra-rare disorders and improving the quality of life of people with rare diseases is one of the most important goals. This strategic partnership reinforces this commitment with a therapeutic offer for patients affected by LHON, a neurodegenerative disease targeting the optic nerve and characterized by sudden vision loss”, commented Ugo Di Francesco, Chief Executive Officer, Chiesi Group.

Santhera will license and transfer to Chiesi Group all of its rights for the development, commercialization and distribution of Raxone for the treatment of LHON and any other potential ophthalmological indications for all territories worldwide except the US and Canada.

The closing of the transaction is subject to customary approvals and is currently expected to occur in the third quarter 2019. As of that date, the advance payment of CHF 50 million (EUR 44 million) will also become due.

In an interim phase Santhera will continue to provide medical, technical, logistical and scientific support with regard to ongoing market authorization activities and/or market access undertakings for several months. In this context, the parties agreed that Santhera will continue to commercialize Raxone for LHON in France until ongoing pricing and reimbursement negotiations have been finalized. Santhera will also be responsible to complete the ongoing Post Authorization Measures, expected by 2021, in conjunction with the centralized European Marketing Authorization granted in 2015.

Following the transaction, Santhera will focus its resources on advancing its late-stage clinical pipeline of products for the treatment of neuromuscular and pulmonary diseases. In particular, Santhera intends to fully exploit its strategic position in DMD therapy development, with ongoing programs to help all DMD patients irrespective of causative mutations, disease stage or age. Addressing the needs of advanced DMD patients experiencing respiratory dysfunction, Santhera plans to submit a conditional marketing authorization application (MAA) for Puldysa® (idebenone) to the EMA. Pivotal study data for vamorolone as treatment of younger, still ambulatory DMD patients is expected in 2020. In addition, Santhera’s expertise in the respiratory area through its activities in the DMD space led to the acquisition of the promising clinical-stage asset POL6014, which has the potential to treat cystic fibrosis (CF) and other pulmonary diseases. Other pipeline elements include strategies to treat congenital muscular dystrophies.

Centerview Partners acted as exclusive financial advisor to Santhera for this license agreement.