XenoPort, Inc. (Nasdaq:XNPT) announced today that it has reached an agreement with Glaxo Group Limited (GSK) to terminate their collaboration agreement concerning Horizant® (gabapentin enacarbil) Extended-Release Tablets, for which GSK held commercialization rights and certain development rights in the United States.
Pursuant to a termination and transition agreement entered into between the parties, GSK is returning Horizant rights to XenoPort and providing certain assistance during a transition period. The termination and transition agreement also provides for a mutual release of claims and resolves all ongoing litigation between the parties. XenoPort acknowledges that GSK fulfilled its contractual obligations on the development, manufacturing and commercialization of Horizant.
During the transition period that will end on April 30, 2013, GSK will continue to exclusively commercialize, promote, manufacture and distribute Horizant in the United States. XenoPort will not be responsible for any losses associated with the terminated collaboration agreement, and XenoPort will not receive any revenue or incur any losses from GSK’s sales of Horizant during the transition period. GSK will also continue to fully fund the costs associated with the management and conduct of clinical studies initiated by GSK prior to the date of the termination and transition agreement. In addition, prior to the end of the transition period, GSK will provide to XenoPort inventory of gabapentin enacarbil in GSK’s possession that is not required for use by GSK in the manufacture of Horizant. In exchange for such inventory, XenoPort will make annual payments to GSK of $1.0 million for six years beginning in 2016.
Following the transition period, XenoPort will assume all responsibilities for further development, manufacturing and commercialization of Horizant in the United States. GSK has also agreed that, if requested by XenoPort, GSK will continue to supply Horizant tablets to XenoPort for up to an additional six months following the transition period on pricing terms established under the termination and transition agreement and to be further memorialized in a supply agreement to be entered into between the parties.As part of the termination and transition agreement, GSK is purchasing $20.0 million of common stock of XenoPort, or an aggregate of 1,841,112 shares at $10.863 per share, which per share price represents a 12.5 percent premium to the average of the closing prices of XenoPort’s common stock for the 10 trading days prior to October 31, 2012. In addition, subject to the conditions and limitations set forth in a separate stock purchase agreement entered into between the parties, during the next six months, XenoPort has the option to require GSK to purchase up to an additional $20.0 million of common stock of XenoPort at a 12.5 percent premium to the average of the closing prices of XenoPort’s common stock for the 10 trading days prior to the day XenoPort notifies GSK of its decision to exercise this option.