Avanir completes sale of FazaClo to Azur

Upon close of the transaction Avanir received an upfront payment of $42 million, plus $1.9 million in working capital adjustments. Under the terms of the agreement, Avanir could receive up to an additional $10 million in payments in 2009, contingent upon certain regulatory conditions, and up to $2 million in royalties, based on 3% of annualized net product revenues in excess of $17 million.

Avanir has allocated $11 million in payments to pay down a portion of its outstanding debt, and believes that the sale will be sufficient to finance operating expenses through to the end of the next fiscal year, including the initiation of the planned Phase III clinical trial of Zenvia in patients with involuntary emotional expression disorder.

“The rapid close of this transaction is a testament to our team’s ability to execute on our strategic objective of becoming a late-stage, clinical development company dedicated to improving treatments for central nervous system conditions,” said Keith Katkin, Avanir’s president and CEO. “We remain focused on the clinical development of our core asset, Zenvia, where we believe we can generate the most shareholder value.”

Also under terms of the agreement, Azur Pharma has assumed Avanir’s future earn-out obligations to the prior owner of Alamo Pharmaceuticals payable upon the achievement of certain sales milestones after the closing of the transaction. Avanir will finalize the transfer of FazaClo business operations to Azur Pharma in the coming months.