GSK, XenoPort ending Horizant deal

GlaxoSmithKline plc (LSE:GSK; NYSE:GSK) and XenoPort Inc. (NASDAQ:XNPT) mutually agreed to terminate an amended 2007 deal under which the pharma has U.S. commercialization rights to Horizant gabapentin enacarbil. The termination settles a lawsuit between the partners to determine whether GSK fulfilled its contractual obligations to maximize sales of Horizant. The transported prodrug of gabapentin is approved in the U.S. to treat restless legs syndrome (RLS) and to manage postherpetic neuralgia (PHN). GSK will continue to commercialize Horizant in the U.S. and fully fund ongoing trials of the drug through April 30, 2013, when the deals ends. Thereafter, XenoPort will be responsible for further development and commercialization. GSK launched Horizant in the U.S. in July 2011 for RLS. XenoPort said the pharma reported U.S. Horizant sales of $4.4 million for the first nine months of 2012.

Under the termination terms, GSK will also purchase 1.8 million XenoPort shares at $10.86, or about $20 million. The price is a 46% premium to XenoPort's close of $7.46 on Wednesday, before the termination was announced. Over the next six months, XenoPort may require GSK to purchase up to an additional $20 million in XenoPort shares. XenoPort has received $130 million in clinical and regulatory milestones from GSK under the deal. ...