Cincinnati-based Blue Ash Therapeutics has reached an agreement in which Forest Laboratories (NYSE:FRX) will purchase the rights to an anti-arrhythmia drug the Ohio firm has been developing.
New York-based Forest didn’t release financial terms of the deal in a statement. Under the terms of the deal, Forest will be responsible for all future development and commercialization activities and costs associated with the drug, azilimide.
Forest will make an upfront payment to Blue Ash, as well as future milestone payments based on successful commercialization of the drug.
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The deal is a big win for Blue Ash’s Cincinnati-based investors, Queen City Angels and CincyTech, a state-backed venture development group. Even though Blue Ash will continue to operate as a company, the deal represents the sale of its key asset, and its investors will cash out, according to Carolyn Pione Micheli, a spokeswoman for CincyTech.
“Our $250,000 investment will be returned at 10x — $2.5 million, which will be distributed to our limited partners,” Micheli said. “It’s a great return for us and the investors in our fund.”
Blue Ash’s sale is CincyTech’s first exit, Micheli said.
Other investors include New York-based Healthcare Value Capital and Southern Ohio Creates Companies.
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Azilimide is just one key step from obtaining regulatory approval for sales in the U.S. If Forest can successfully complete a phase 3 clinical trial of the drug, U.S. Food and Drug Administration approval could follow.
Blue Ash has obtained FDA approval to move ahead with the phase 3 trial, but hasn’t yet dosed the trial’s first patient, said Kevin Malloy, the company’s chief operating officer. That means the drug is likely at least a year or two away from market approval.
The drug is designed to work alongside implantable cardioverter defibrillators (ICDs) to help stabilize heart rhythms in some patients who have life-threatening ventricular arrhythmia. There are no approved anti-arrhythmia drugs for ICD patients, according to Forest.
While defibrillators can save lives by restarting hearts or returning them to normal rhythms, the resulting pacing and shocks often cause patients anxiety, fear and intense pain that lead to more symptoms, emergency room visits and hospitalizations. Doctors manage the defibrillator problems with off-label generic drugs that are poorly tolerated and have serious, irreversible side effects. If azilimide is approved, that could change.
Forest said azilimide, if approved, could be prescribed along with its beta blocker Bystolic for the treatment of hypertension.
Blue Ash was formed in late 2008 to commercialize azilimide, which was originally developed by Procter & Gamble. The Cincinnati consumer products giant later sold its pharmaceuticals business to Irish drugmaker Warner Chilcott (Nasdaq: WCRX), so Blue Ash licensed the drug from the Irish firm.
Malloy said Blue Ash would continue as a company, though he couldn’t comment on what the company would focus on now that its primary asset is about to be sold.
Another promising Cincinnati drug company, Akebia Therapeutics, was also formed to commercialize drugs originally developed at P&G. The company is developing an orally administered anti-anemia drug for kidney disease patients.
