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Small Biotech Enters Patent Deal with British Company Targeting Schizophrenia

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A small-cap American biotech has secured a patent agreement with a larger British firm, garnering the attention of three sector analysts.

In an Oct. 2 press release, DURECT Corp. (DRRX:NASDAQ) announced "a patent purchase agreement with Indivior UK Limited, an affiliate of Indivior Plc (INDV:LON), whereby DURECT has assigned certain of its U.S. patent rights to Indivior." The deal, according to the press release, "may provide further intellectual property protection for RBP-7000, Indivior's investigational once-monthly injectable risperidone product for the treatment of schizophrenia."

DURECT received $12.5 million upfront in the agreement, "with the potential for an additional $5 million based on a regulatory milestone," according to the release. Indivior Plc is a $3.5 billion market cap company.

In a note published on Oct. 3, Zacks Small-Cap Research analyst Grant Zeng wrote, "We think this is a great deal for DURECT. The deal not only boosts DURECT's balance sheet, but also validates the company's long-acting risperidone formulation technology."

According to Stifel analyst Adam Walsh, "Indivior will use DURECT's delivery technology IP (intellectual property) in its once-monthly, injectable risperidone product, RBP-7000, for the treatment of schizophrenia." In an Oct. 2 company update, Walsh noted that "we view this deal positively as DURECT is able to gain exposure to a late stage asset in a lucrative deal. . ."

Patrick Dolezal, an analyst for LifeSci Capital, also took note of the deal, writing in an Oct. 2 company update that, "given the realized near-term revenue, and potential recurring, long-term revenues, we view this agreement as a favorable development for DURECT."

Indivior's RBP-7000 is an "investigational, once-monthly injectable risperidone in the ATRIGEL delivery system for the treatment of schizophrenia," according to an Oct. 2 press release from the company announcing the submission of a new drug application (NDA) for the therapy in the United States. According to Indivior, a Phase 3 study of the efficacy of RBP-7000 has "demonstrated statistically clinical improvement compared to placebo based on changes in mean Positive and Negative Syndrome Scale (PANSS) total and Clinical Global Impression-Severity of Illness (CGI-S) scores at 8 weeks."

"It is rewarding to know that Indivior's RBP-7000, if approved, has the potential to help patients with schizophrenia and that our shareholders will have the opportunity to participate in potential future revenues from this product," DURECT’s CEO and President, James E. Brown, stated in his company's press release.

While Stifel analyst Walsh noted the Indivior agreement is a "positive" for DURECT, he also mentioned the company's other pipeline assets. "We remain focused on top line results for Posimir P3 PERSIST trial (expected 4Q17). The Sandoz deal for U.S. rights to Posimir brings large pharma validation and a potential steady source of future milestone/royalty revenue that can be leveraged to support the development of emerging pipeline asset '928."

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1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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