Horizon Pharma Inc said it would buy the right to market AstraZeneca Plc's arthritis drug Vimovo in the United States for an upfront payment of $35 million, sending up its shares 24 percent in premarket trading.
Horizon will also pay 10 percent royalty on net sales of the drug to Pozen Inc, which licensed the drug to AstraZeneca in 2010.
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Pozen, whose shares were up 7 percent, said it would get guaranteed minimum royalty payments of $5 million in 2014, and $7.5 million each year after that, as long as no generic forms were sold in the market.
Horizon said it would begin selling the drug in the first quarter of 2014 and expected to be profitable in 2014, on an adjusted basis.
The company also said it expects net revenue of $190 million to $205 million in 2014.
Vimovo, which is approved to treat three forms of arthritis and to reduce the risk of stomach ulcers in patients taking certain arthritis drugs, brought in sales of $23 million in AstraZeneca's third quarter. (http://link.reuters.com/wat74v)
AstraZeneca recorded $5 million in sales of the drug in the United States. The company will continue to sell Vimovo outside the United States.