Daiichi Sankyo and Charleston Laboratories announce collaboration

Daiichi Sankyo and Charleston Laboratories, Inc., through its wholly owned subsidiary LOCL Pharma, Inc., announced today that the parties have entered into a strategic collaboration for the development and U.S. commercialization of Charleston Laboratories’ novel hydrocodone combination products, including CL-108, being studied for the treatment of moderate to severe acute pain as well as the reduction of Opioid-Induced Nausea and Vomiting (OINV). 

CL-108 combines 12.5 mg of immediate-release promethazine with 7.5 mg of hydrocodone and 325 mg of acetaminophen.  Charleston recently completed a 465-patient phase 3 trial studying the effects of CL-108 as a treatment for moderate to severe acute pain and the reduction of OINV, where CL-108 demonstrated high statistical significance (P<0.01) in both primary endpoints relative to pain reduction and the symptoms of OINV.

Hydrocodone is the most widely prescribed medication in the United States, with more than 131 million prescriptions annually. Opioid-induced nausea affects up to 30 percent of these patients, with approximately 15 percent experiencing vomiting.  These unwanted side effects can result in poor pain control related to difficulties with compliance or return visits to the physician or the hospital for further treatment.  As a consequence, OINV poses a significant burden for patients and prescribers, while contributing significant costs to the healthcare system.

With this collaboration, Daiichi Sankyo, Inc., the U.S. subsidiary of Tokyo-headquartered Daiichi Sankyo Co., Ltd. (TSE: 4568), will be the commercialization partner for CL-108 in the United States. Charleston Laboratories will be responsible for manufacturing activities for CL-108 and will receive the right to co-promote this and other hydrocodone products in the United States.

Under the terms of the agreement, which is pending Hart-Scott-Rodinoclearance, Charleston Laboratories will receive $200 million, split evenly between an upfront cash payment and a near-term milestone and up to an additional $450 million in milestone payments connected to the filing and approval of its novel fixed-dose hydrocodone products in the United States.  In addition, Charleston Laboratories will receive escalating, tiered, double-digit share of the gross operating margin from the products.  

“We are proud to partner with Charleston Labs on this exciting and unique fixed-dose combination tablet, which will seek to simultaneously address severe pain and opioid-related nausea and vomiting to benefit patients,” said Dr. Mahmoud Ghazzi, MD, PhD, Global Head of Development and Executive Vice President at Daiichi Sankyo Co., Ltd.

“CL-108 represents an opportunity at the intersection of innovation and patient need,” said Ken Keller, President, U.S. Commercial of Daiichi Sankyo, Inc. “Daiichi Sankyo has proven success in the U.S. primary care arena, a key market for pain management, and we look forward to the potential of CL-108.”

“From our inception, it has been our goal to identify an industry-leading partner that is patient-focused, with a shared appreciation for the importance of educating healthcare providers on the significant issue of Opioid-Induced Nausea and Vomiting,” said Ryan Baker, Founder and Chief Operating Officer of Charleston Laboratories. “Daiichi Sankyo has successfully commercialized several medicines in the United States, and we feel they are the ideal strategic fit for Charleston’s lead asset, CL-108.”

“Charleston is extremely pleased to enter into this exclusive US license agreement with Daiichi Sankyo,” said Paul Bosse, Founder, President and Chief Executive Officer of Charleston Laboratories. “We look forward to applying our strong clinical and regulatory capabilities toward the goal of improving patient well-being.  This agreement highlights Charleston’s tenacity and our long-term commitment to build a preeminent pain company that benefits patients and shareholders alike.”

Wilson Sonsini Goodrich & Rosati acted as legal counsel to Charleston Laboratories.