King Pharmaceuticals to acquire Avinza from Ligand for $265 million

By Lisa Kerner

Charlotte, N.C., Sept. 7 - King Pharmaceuticals, Inc. entered into a definitive asset purchase agreement to acquire U.S. and Canadian rights to Avinza (morphine sulfate extended release) from Ligand Pharmaceuticals Inc. for a total up-front cash consideration of $313 million, plus a tiered royalty agreement through November 2017.

Under the agreement, King assumes a product-related liability of $48 million owed to Organon and all existing product royalty obligations.

King will pay Ligand a 15% royalty during the first 20 months after the closing date and subsequent royalty payments based on calendar year net sales.

Ligand entered into a separate contract sales agreement giving King the right to promote Avinza during a transition period until closing of the asset purchase agreement.

Avinza is an extended-release formulation of morphine indicated as a once-daily treatment for moderate-to-severe pain in patients requiring continuous opioid therapy. Retail sales of the drug totaled $179 million in 2005.

King is a Bristol, Tenn.-based branded pharmaceutical company.

Ligand is a pharmaceutical company located in San Diego.

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