Recro Pharma, Inc. has announced the completion of its previously announced acquisition of assets from Alkermes plc and its affiliates including worldwide rights to IV/IM meloxicam, a proprietary, Phase III-ready, long-acting COX-2 NSAID for moderate to severe acute pain, and a contract manufacturing facility, royalty and formulation business.
“Completion of this transaction is a significant corporate milestone for Recro Pharma as it provides a second, complementary, Phase III-ready acute pain product to our portfolio, and adds infrastructure and cash flow which may help fund the development of our pipeline in the future," said Gerri Henwood, Recro Pharma’s CEO. “With upcoming top-line data readout of our Post Op Day 1 Phase II trial of Dex-IN midyear 2015, we are excited for the potential of having two drug candidates in Phase III for the treatment of acute pain by the end of this year.”
Under the terms of the agreement, Recro Pharma paid Alkermes $50 million up-front and obtained the rights to IV/IM meloxicam and ownership of a cGMP manufacturing facility and related business located in Gainesville, GA. In 2014, this facility generated over $70 million in unaudited revenues.
Alkermes is eligible to receive up to an additional $120 million in milestone payments upon the achievement of certain regulatory and net sales milestones and royalties, related to IV/IM meloxicam. At closing, Recro Pharma issued Alkermes a seven-year warrant to purchase an aggregate of 350,000 shares of Recro Pharma common stock.
The $50 million up-front payment was funded via a five-year senior secured term loan with an affiliate of OrbiMed (“OrbiMed”). In conjunction with the term loan, Recro Pharma issued OrbiMed a seven-year warrant to purchase an aggregate of 294,928 shares of Recro Pharma common stock.