Merck Smartly Unloads Saphris® US Rights To Company Now Run By Former Schering-Plough Guy

Well. . . this one is simply hilarious. And it literally drips with irony. Merck is selling off Saphris^® -- a drug franchise as to which it most recently took a third-of-one-billion-dollar impaired asset charge (August 2013). Wow. And one of Fast Fred's Kool Aid^® drinkers(!) is the (most likely over-paying) buyer.

Don't misunderstand: I love Merck's decision here -- it gets a quarter billion in cash, for a franchise that has never surpassed $120 million a year in sales -- worldwide. It also unloads a millstone foisted upon it by that goof Fred Hassan (the Schering-Plough mentor of the bloke who just bought it back!). Small world here. It will require Hart Scott Rodino antitrust legal review (at FTC/DoJ), but my bet is that the deal will likely clear that hurdle in early 2014.

[It is fascinating that Merck was able to sell off the rights in the US for a little more than what I predicted it had left on the books, for the franchise -- $500 million, less the August 2013 write-down of $330 million, left $170 million on the books. And so, getting $240 million in cash -- is a nice little gain for Whitehouse Station. And Merck still gets paid to manufacture the inventory -- continues to cover overhead burden in Puerto Rico. Thus, my conjecture above that Brett Saunders has once again overpaid, by not doing enough diligence, on Merck's very public SEC disclosures. But that is a side-story -- one true of most legacy S-P top six officers: flashy-form, over solid-substance.]

From the Wall Street Journal story -- do go read it all:

. . . .Forest Laboratories, Inc. today announced that the company is acquiring exclusive rights in the United States for Saphris (asenapine) sublingual tablets, a treatment for adult patients with schizophrenia or acute bipolar mania, from Merck Sharp & Dohme B.V., a wholly owned subsidiary of Merck & Co., Inc. . . .

Under the terms of the agreement, Forest will make an upfront payment of $240 million and additional payments to Merck based on defined sales milestones. Merck will remain responsible for product supply. Forest will assume responsibility for continued commercialization, including completing certain post marketing studies of Saphris following a transition period, and will be the marketing authorization holder. Other details of the financial terms of the agreement were not disclosed. . . .

"We are pleased to gain access to another commercial product in the CNS category. With Viibryd and our soon to be launched product, Fetzima, Saphris complements our current position in psychiatry and gives us access to the important schizophrenia segment as we continue to work toward registering and commercializing cariprazine with our partner Gedeon Richter," said Brent Saunders, chief executive officer and president of Forest Laboratories. "This deal is immediately accretive to Forest's earnings and makes us more relevant to our customers, as well as our current and future business partners in the CNS category. . . ."

And yes, that is the same guy who was Fred Hassan's right hand man, when he was touting asenapine as the largest of then Schering-Plough's 2009 opportunities. The rest, as they say, is. . . history. Or should I say. . . mythology(?). . . You -- dear reader -- will decide.