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ORIGINAL: Nuvo Pharmaceuticals® Announces "at risk" Launch of Generic Version of Vimovo in the United States
2020-03-04 17:05 ET - News Release
MISSISSAUGA, ON, March 4, 2020 /PRNewswire/ - Nuvo Pharmaceuticals Inc. (Nuvo or the Company) (TSX:NRI; OTCQX:NRIFF), a Canadian focused healthcare company with global reach and a diversified portfolio of commercial products, today announced Dr. Reddy's Laboratories Inc. (DRL) has launched its generic version of Vimovo in the United States.
DRL's launch of its generic version of Vimovo is "at risk" as Nuvo Pharmaceuticals (Ireland) DAC (Nuvo Ireland) continues to hold valid U.S. Patent Nos. 8,858,996 and 9,161,920 (the '996 and '920 patents) covering Vimovo in the U.S. The '996 and '920 patents are currently the subject of patent infringement litigation against DRL. The parties have mutually agreed on a pretrial litigation schedule with the court extending through to mid-2021. The term of the '996 and '920 patents extends to May 31, 2022.
"Nuvo Ireland, with its U.S. commercial partner, continue to work together to vigorously defend the '996 and '920 patents," stated Tina Loucaides, Nuvo's Vice President, Secretary and General Counsel.
As a result of an entry of a generic version of Vimovo in the U.S., Nuvo Ireland's US$7.5 million annual minimum royalty from its partner has ceased. The royalty rate for 2020 will be calculated as 10% of net sales of Vimovo in the U.S., subject to certain step-down provisions upon achievement of generic market share thresholds. Nuvo Ireland's U.S. partner had disclosed Vimovo full year 2019 net sales of US$52.1 million. A launch of a generic version of Vimovo in the U.S. does not impact Nuvo Ireland's global Vimovo business in markets outside of the U.S. Nuvo Ireland will continue to receive royalty payments from its global partner, Grunenthal GmbH on global net sales of Vimovo.
In June 2019, the Company announced its intention to reduce annual operating expenses by approximately $7.0 million due to identified synergies and the implementation of organizational changes. The Company began to realize these synergies during the second half of 2019.
In June 2019, Deerfield Management Company, L.P. (Deerfield) and certain of its affiliated funds, as lenders, and the Company, agreed to an amendment to its financing agreement to provide, among other things, for a payment deferral mechanism in the event that Vimovo U.S. market exclusivity is lost.
The amendment will allow Nuvo the option to defer a portion of the mandatory minimum quarterly prepayments by the difference between one quarter of the existing US$7.5 million annual minimum royalty due from Vimovo sales in the U.S. and the actual amount of royalties received in the applicable quarter, in the event Vimovo U.S. market exclusivity is lost earlier than May 2022. The amount of any deferred prepayment would, until repaid in accordance with the amendment, be subject to an interest rate of 12.5% per annum.
About Nuvo Pharmaceuticals Inc. Nuvo (TSX: NRI; OTCQX: NRIFF) is a Canadian focused, healthcare company with global reach and a diversified portfolio of commercial products. The Company targets several therapeutic areas, including pain, allergy and dermatology. The Company's strategy is to in-license and acquire growth-oriented, complementary products for Canadian and international markets. Nuvo's head office is located in Mississauga, Ontario, Canada, the international operations are located in Dublin, Ireland and the U.S. Food and Drug Administration (FDA), Health Canada and E.U. approved manufacturing facility is located in Varennes, Qubec, Canada. The Varennes facility operates in a Good Manufacturing Practices (GMP) environment respecting the U.S, Canada and E.U. GMP regulations and is regularly inspected by Health Canada and the U.S. Food and Drug Administration. For additional information, please visit www.nuvopharmaceuticals.com.
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