In a play to extend the life of its top-selling Alzheimer’s drug memantine (Namenda XR) beyond its patent expiration, New York-based Forest Laboratories (NYSE: FRX) agreed to pay Adamas Pharmaceuticals up to $160 million to help develop a single pill combining the drug with a generic Alzheimer’s treatment.
Under the agreement, Forest will pay Adamas, based in Emeryville, CA, $65 million upfront and as much as $95 million in future milestone payments. Forest will have exclusive U.S. rights to commercialization but Adamas will receive royalties starting five years after the launch of the drug.
Forest said in a press release that it expects to launch the new formulation, which will combine extended release versions of memantine and the generic drug donepezil, in 2015—the same year the Forest drug is due to come off patent. Memantine is meant to lessen symptoms of dementia in patients with moderate to severe Alzheimer’s, but like the other Alzheimer’s drugs on the market it is controversial because the benefits are usually small and short lived. However, many neurologists prescribe both memantine and donepezil to Alzheimer’s patients, believing that the combination may give greater benefit because the two drugs work in different ways.
Memantine is one of Forest’s leading products—with sales totaled $1.4 billion for the company’s fiscal year that ended March 31, and Forest expects sales to grow another 17 percent in fiscal 2013. Adamas was already in the process of developing the combination treatment, and said in the press release that the deal with Forest will allow it to accelerate the development with plans to file for FDA approval in 2014.