Pharmos
Corporation Sells Ophthalmic Products to
Bausch & Lomb
Proceeds
to Fund Core CNS and Neuro-Inflammatory Business
Could Reach $49 Million
Iselin,
NJ, October 10, 2001 - Pharmos Corporation (Nasdaq:
PARS and Nasdaq Europe: PHRM) today announced that Bausch
& Lomb (NYSE: BOL) has purchased all rights to Pharmos'
loteprednol etabonate (LE) ophthalmic business for cash
and assumption of certain ongoing obligations. The acquisition
has two parts, one for products already on the market,
the second for a medication now in clinical trials. Based
on meeting certain new product milestones, the price of
the total acquisition may reach $49 million.
Proceeds
from the sale will enable Pharmos to strengthen its product
pipeline of therapeutics for central nervous system (CNS),
neurological and inflammation-related indications, reinforcing
a strategic decision by Pharmos to focus resources within
this core area of expertise.
"The
sale of the LE business is a logical outcome of our strategy
to maximize the value of this asset in order to support
our valuable CNS and neuro-inflammatory franchise,"
said Haim Aviv, Ph.D., Chairman & CEO of Pharmos.
"This transaction will enable Pharmos to sharpen
its focus on existing product development activities and
facilitate efforts to broaden our pipeline with new products
and technologies."
Transaction
Terms and Use of Proceeds
Pharmos
received approximately $25 million in cash for its rights
to Lotemax® and Alrex®, prescription products
that are made and marketed by Bausch & Lomb under
a 1995 Marketing Agreement with Pharmos.
Bausch
& Lomb also is acquiring future extensions of LE formulations
including LE-T, a product currently in Phase III clinical
trials, for approximately $14 million, with the actual
payment price based on the date of market introduction
of this new combination therapy. An additional milestone
payment of up to $10 million could be paid to Pharmos
to the extent sales of the new product exceed an agreed-upon
forecast in the first two years.
Pharmos
compensated the LE patent owner approximately $2.7 million
from the proceeds of the sale of Lotemax and Alrex in
return for his consent to Pharmos' assignment of its rights
under the license agreement to Bausch & Lomb, and
will also pay the patent owner a portion of the LE-T sale
proceeds and a portion of its milestone payment.
The
transaction provides Pharmos with significant capital
to invest in its strategic growth as a leader in the sizeable
marketplace for CNS, neurological and inflammation-based
disorders. The Company plans to devote its resources toward
three primary areas of activity: to support the successful
completion of its current Phase III pivotal trial of dexanabinol
for traumatic brain injury (TBI), to ramp-up efforts in
advancing its other drug candidates from preclinical to
clinical stages, and to support potential partnering arrangements,
strategic collaborations, in-licensing and other tactical
moves that could provide new drug candidates for clinical
development, thereby ensuring a robust pipeline.
About
Pharmos' CNS Product Platform
Pharmos
points to several factors behind its strategic targeting
of markets for neurological and inflammation-based disease
treatments. Its technology utilizing synthetic, non-psychotropic
cannabinoid and derivative compounds has produced molecules
providing an exceptional level of neuronal protection
against certain disease- and injury-related destructive
biochemical and inflammatory processes in preclinical
and clinical studies. Foremost in progress within this
platform technology is dexanabinol, which demonstrated
the ability to prevent edema and elevation of intracranial
pressure through a unique combination of mechanisms of
action in Phase II TBI studies, and which has an excellent
safety profile. Beyond TBI, Pharmos believes its technology
holds great promise in the development of safe and effective
treatments for stroke, neuropathic pain, multiple sclerosis
(MS) and other neurological conditions in which the pathological
neuro-inflammatory sequence involved is similar to that
of TBI, and for such inflammation-based disorders as myocardial
infarction and renal ischemia.
The
therapeutic markets targeted by Pharmos' research represent
areas of great unmet need. The worldwide TBI market is
estimated at approximately $1 billion annually and is
currently absent of any approved therapeutics. Approximately
1.5 million TBI incidents occur each year in the U.S.
More than 50,000 of its victims die, and between 80,000
and 90,000 survive with permanent disabilities. Current
therapy for TBI is limited to emergency medical care,
which may slow the development of damage to the brain,
but falls short of securing a good neurological outcome
for the patient. Pharmos expects to complete enrollment
of 860 patients in its international pivotal Phase III
TBI trial of dexanabinol, now underway, in 2003.
Stroke
is the third leading cause of death in the U.S. and a
leading cause of disability in adults. Recent data indicate
the number of persons suffering a new or recurring stroke
in the U.S. is roughly 730,000 per year and worldwide
market size estimates for stroke treatments exceed $1
billion. The one drug approved for stroke has demonstrated
the ability to prevent and reduce vascular obstruction,
but due to certain limiting factors, is only administered
to a small percentage of stroke patients. Pharmos is currently
undertaking advanced preclinical testing of two dexanabinol
derivative compounds which, in addition to allowing for
a relatively long treatment window, have demonstrated
both strong neuro-protective and anti-inflammatory properties
in animal stroke models. Pharmos expects to conclude preclinical
studies with these compounds next year.
Encouraged
by preclinical and clinical results obtained in TBI and
stroke studies, Pharmos is evaluating in earlier preclinical
testing various molecules from its growing library of
non-psychotropic cannabinoid and derivative compounds
as agents to treat neuropathic pain, MS, Parkinson's disease,
myocardial infarction, and other disorders in which inflammatory
processes play a major pathological role. The markets
for products to treat these indications have defined needs
and represent sizable opportunities for therapeutics that
are both safe and effective.
Pharmos
Corporation discovers and develops novel therapeutics
to treat a range of inflammatory and neurological disorders,
such as traumatic brain injury and stroke. The Company
has an extensive portfolio of drug candidates under development,
as well as discovery, preclinical and clinical capabilities.
Statements
made in this press release related to operational expectations
and projections of the Company are forward-looking and
are made pursuant to the safe harbor provisions of the
Securities Litigation Reform Act of 1995. Such statements
involve risks and uncertainties which may cause results
to differ materially from those set forth in these statements.
Additional economic, competitive, governmental, technological,
marketing and other factors identified in Pharmos' filings
with the Securities and Exchange Commission could affect
such results.
References:
Centers for Disease Control and Prevention
National Center for Injury Prevention and Control
Traumatic Brain Injury in the United States - A Report
to Congress, December 1999.
http://www.cdc.gov/ncipc/pub-res/tbicongress.htm
Brain
Injury Association, Inc.
http://www.biausa.org
National
Stroke Association
http://www.stroke.org
American
Stroke Association
(A Division of the American Heart Association)
http://www.strokeassociation.org
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