As part of a previous agreement, Novartis had produced the multiple sclerosis drug for Bayer. Bayer will now manufacture Betaseron at the site in California and retain full control of all manufacturing and process technology used in the production of Betaseron and will continue to employ the facility's employees.
Novartis will transfer manufacturing responsibility for Betaseron to Bayer for a one-off payment of approximately $110 million. This agreement will allow Bayer to stop paying royalties to Novartis after the expiration of the original regulatory filing, development and supply agreement in October 2008.
Novartis plans to launch its own branded version of the drug in 2009. Bayer will support Novartis in the filing process of its branded version of the drug and supply the Swiss company with Betaseron for a double-digit royalty payment.
“In addition to improving the profitability of the Betaseron franchise through this transaction we believe a second independent brand will reinforce the existing growth of the global MS market,” said Arthur Higgins, chairman of the Board of Management of Bayer Schering Pharma AG.
The agreement is subject to regulatory consent and resolves all outstanding legal actions between the parties regarding Betaseron. Further financial details were not disclosed.