April 7 (Bloomberg) -- Novartis AG plans to sell the global rights to manufacture and market Elidel skin cream to Meda AB for an upfront payment of $420 million.
Meda will make Elidel within three years of the agreement being concluded, Basel, Switzerland-based Novartis said in a statement today. Novartis will receive an accounting gain of about $406 million from the transaction, of which $345 million will be recognized by the end of 2011 and the remainder in the following two years.
Elidel treats mild to moderate atopic dermatitis and received regulatory clearance in the U.S. in 2001 and the European Union in 2002, Novartis said. The deal with Stockholm-based Meda, which will be filed for review with the U.S. and some other antitrust authorities, is expected to be completed during the second quarter of 2011, it said.
Meda will in turn license the drug in the U.S., Canada and Mexico to Mississauga, Ontario-based Valeant Pharmaceuticals International Inc., the Canadian company said today in a statement. Terms of this contract will be disclosed when the companies have a firm agreement, it said.
Valeant “has a stronger position” in dermatology than Meda in that region, Anders Larnholt, vice president of investor relations at the Swedish drugmaker, said today by phone.
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