Biovail buys Cambridge Labs' tetrabenazine rights for $200M

Canada's Biovail has entered into a definitive agreement to acquire worldwide development and commercialization rights to the entire  portfolio of tetrabenazine products from the Irish arm of the UK-based  Cambridge Laboratories.

Under the terms of the agreement, Biovail will make a payment of $200.0  million upon closing of the transaction and will pay an additional $30.0  million in two tranches over the subsequent 24 months to acquire these  global rights to the tetrabenazine product portfolio. This includes a  controlled-release formulation of tetrabenazine in development for  Tourette Syndrome (BVF-018), as well as a tetrabenazine-derived New  Chemical Entity, RUS350 - a next-generation molecule that may enter  Phase II clinical development in the next 12 months, and  Xenazine/Nitoman, for the treatment of chorea associated with  Huntington's disease. The transaction is anticipated to close within 90  days.

"This acquisition will be immediately accretive to revenues, margins and  operating cash flows, and is anticipated to be moderately accretive to  GAAP earnings per share in 2010," said Bill Wells, chief executive of  Biovail. The transaction is expected to provide minimal operating cash  flows in 2009 and $23.0 million to $26.0 million in 2010.