GlaxoSmithKline (NYSE:GSK) is pushing back against drug partner XenoPort (NASDAQ:XNPT) over claims that GSK is not doing enough to sell the restless leg syndrome treatment they jointly developed.
The British pharma giant has asked a federal court to rule that it has lived up to the terms of its partnership agreement with XenoPort and that GSK’s rights to the drug Horizant should be preserved, Bloomberg News reported. GSK’s suit in federal court in Delaware comes a month after XenoPort sought to terminate its partnership with GSK. In a securities filing, the California drug company claimed that GSK had breached the partnership agreement, which justified XenoPort taking steps to terminate the deal.
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GSK, which has its U.S. headquarters in Research Triangle Park, North Carolina, entered a partnership with XenoPort in 2007 to develop and commercialize a compound discovered by XenoPort that would eventually become the drug Horizant. The deal paid XenoPort $75 million up front with additional milestone payments of $65 million for progress leading to commercialization of the restless leg syndrome drug. The U.S. Food and Drug Administration approved Horizant for restless leg syndrome last April.
But last month, XenoPort gave notice to GSK that the British pharmaceutical company has “breached its contractual obligation to use commercially reasonable efforts” to maximize Horizant sales and reach the milestones set in the agreement. The agreement gives XenoPort the right to terminate the pact if GSK doesn’t hold up its part of the deal. Termination becomes effective 90 days from XenoPort’s notification to GSK, which gives GSK until April 24 to remedy its Horizant sales efforts. If the agreement is terminated as a result of a GSK contract breach, rights to Horizant revert to XenoPort.
Restless leg syndrome is not the only indication at stake in the contract dispute. The deal also has provisions for development of the compound for other treatments and last summer, GSK filed an application to develop the compound for postherpetic neuralgia in adults — the pain patients feel in the area where they had a shingles infection. Additional indications could be worth up to $210 million to XenoPort.
