Transaction Case Studies

Forward Integration Of A Development-stage Orphan Drug Company By Acquiring The Rights To An Approved Orphan Drug

Situation Assessment

  • Strongbridge Biopharma (NASDAQ: SBBP) is a global biopharmaceutical company focused on the development and commercialization, and of therapies for rare diseases with significant unmet needs.
  • Upon beginning Locust Walk’s most recent engagement, Strongbridge had two mid/late stage drug candidates in development for rare endocrine disorders. One of these had been acquired as part of a previous Locust Walk engagement.
  • Strongbridge sought to establish a commercial presence by acquiring an approved rare-disease drug, taking advantage of cost, revenue and other strategic synergies as well as creating a platform for future business development and commercial efforts.

Key Activities

  • Working closely with the client, ran a comprehensive search and evaluation of thousands of assets in the orphan/rare disease landscape to identify commercial-stage opportunities of the right size and fit.
  • Leveraged Locust Walk contact network to conduct outreach to a large number of potential partner companies in order to establish transactability.
  • Identified numerous viable opportunities based on scientific rationale, commercial viability and synergistic fit; multiple discussions carried forward to advanced diligence & negotiations.
  • Partnered with Strongbridge to conduct preliminary commercial due diligence, provide valuation modeling, and help negotiate the deal.
  • Initiated and managed partner communications, establishing dialog and foundation for deal process. Overcame challenges and hurdles to deal execution.

Successful Outcome

  • Strongbridge successfully acquired the US rights to Keveyis, the first and only FDA-approved treatment for hyperkalemic, hypokalemic, and related variants of primary periodic paralysis (a rare and debilitating neurological disorder), from Taro Pharmaceuticals for $8.5M upfront (in two installments) plus contingent milestones and a supply agreement (December 2016).
  • Taro had ceased commercialization of Keveyis nine months after its 2015 launch, creating an opportunity for Strongbridge, whose management has deep experience commercializing orphan drugs.

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CLIENT: Strongbridge Biopharma

PARTNER: TaroPharma

Buy-side US rights acquisition for Keveyis