Solvay/Depomed – Top 10 biotech deal terminations of 2011

Posted under Blog, Companies, Depomed, Diagnostics, Funding, Medical Devices, Medical Supply, Pharmaceuticals, Solvay Pharmaceuticals, Startups, Universities, Videos by John Carroll

Partners: Solvay Pharmaceuticals (acquired by Abbott)/Depomed
Based: $ABT - Abbott Park, IL; $DEPO - Menlo Park, CA
Termination date: March 2011
Length: 2.3 years
Deal: $395 million
Program: DM-1796, gabapentin for pain

What went wrong: When Solvay signed up for the pain program in 2008, the pharma company shelled out $25 million upfront to gain North American rights to the drug, a once-daily treatment that promised to eliminate some of the side effects associated with gabapentin.

Then Abbott bought Solvay in 2009 for $7 billion and the new owner apparently took a different view of the matter. At the beginning of the year, the DM-1796 deal was in disarray. Depomed announced that Abbott was not going to make good on its end of the deal to commercialize the drug after an FDA approval.

"DM-1796 fills a very significant unmet market need and we hope to see it effectively marketed," said Depomed CEO Carl Pelzel, at the time the FDA was still reviewing the NDA. Depomed prepared itself for mediation.

DM-1796, now dubbed Gralise, went on to win an approval for post-herpetic neuralgia (PHN), which is pain after healing of the rash associated with shingles. Abbott paid up on a $48 million milestone for the approval, but the future of this pact is still in limbo.