Cash strapped MDRNA sells CMO unit to Par
The Washington firm had a tough fiscal 08 after Procter & Gamble’s (P&G) withdrawal from a partnership deal the previous year hurt revenues and forced it to cut jobs and refocus on RNA interference (RNAi).
While MDRNA managed to contain its fiscal 08 loss to $59.2m, an increase of just $7m, charges associated with restructuring left it with just $3.4m in cash at the end of the year, down from the $41.6m it ended 2007 with.
As a result, MDRNA has ramped up efforts to complete its transformation and generate cash from the sale of assets. The divestiture of the firm’s contract manufacturing business is one of the last stages of this process.
The manufacturing unit, which employs just three staff at its base in Hauppauge, New York, is a legacy of MDRNA’s days as a nasal delivery specialist and is not core asset according to Matthew Haines, senior director of investor relations.
Haines told Outsourcing-pharma that the unit had made QOL Medical's Nascobal vitamin B12 nasal spray, worldwide rights to which have also been acquired by Par’s branded unit Strativa for $55m (€41m).
He went on to say that Par also purchased the abbreviated new drug application (ANDA) for the nasal osteoporosis treatment calcitonin-salmon, which MDRNA had been contracted to manufacture on its behalf.
MDRNA will be paid an upfront fee for the ANDA, is freed of any manufacturing obligations and will be paid a percentage of profit from sales of the product when it is commercialised by Par.
Haines went on to say that MDRNA is seeking to outsource its final few legacy intranasal drug development programmes, which include products for diabetes, autism and osteoporosis.
In a press statement, MDRNA CEO Michael French said the deal “significantly reduces our non-RNAi related expenses, provides revenue from the commercial sales of calcitonin, and permits the seamless transition of the manufacturing obligations without disrupting our current customers' supply demands”.