ProStrakan in £55m rights deal for cancer pain drug

DRUGS developer ProStrakan has bought the European rights to Abstral, a medicine used to treat severe pain from cancer, as the Borders-based firm’s Japanese owner ramps up its operations on the continent.

ProStrakan has been licensing the drug from Swedish outfit Orexo since 2005 and will now pay the firm £55 million for the European and rest-of-the-world (ROW) rights to the medicine.

Under the deal, Orexo – which is listed on New York’s Nasdaq stock market – will take back the rights to sell Abstral in the United States, where ProStrakan has been promoting the drug.

Galashiels-based ProStrakan will pay Orexo the consideration through instalments over the next three years and will then carry on making royalty payments until 2019.

ProStrakan, which floated in 2005 and was hailed as one of Scotland’s brightest biotechnology hopes, was taken private in a £300m acquisition last year by Japanese peer Kyowa Hakko Kirin (KHK).

At the time, KHK said the deal would allow it to build its presence in Europe and the US and yesterday’s transaction was seen as the latest stage in its expansion, bringing the European operations of Abstral fully in-house.

Tom Stratford, chief executive at ProStrakan, said: “Abstral is a valuable asset, as has been shown by the demand it has generated.

“We regard this agreement as an important step forward for ProStrakan as it secures ownership of this oncology product in our European heartland and a potentially significant income stream from partnerships worldwide.”

Anders Lundström, chief executive at Orexo, added: “I am very satisfied that Orexo now will have full commercial control of Abstral in the US.”