Advancis sale of Keflex rights falls through

By Angela McDaniels

Seattle, Jan. 5 - Advancis Pharmaceutical Corp. said its proposed sale of the U.S. rights to the Keflex brand of cephalexin antibiotic was not completed by Dec. 31 as expected.

Advancis entered into an agreement-in-principle in August 2005 with a private company, which was to pay Advancis $11 million for the exclusive rights to manufacture, market and sell Keflex (cephalexin capsules, USP) in the United States.

As part of the agreement-in-principle, Advancis said it received a non-refundable deposit of $1 million in exchange for assurances that Advancis would not seek or negotiate with additional partners or potential buyers through Dec. 31.

Under certain limited circumstances, the private company may still purchase the rights to Keflex by Feb. 28.

Advancis said it will continue to pursue development of new Keflex products, to seek marketing partners and to record Keflex product sales.

"While we would have welcomed the additional corporate funds a sale of Keflex would have generated in 2005, we believe the Keflex franchise should generate meaningful revenue in 2006 as well as over the years to come," Edward M. Rudnic, chairman, president and chief executive officer, said in a company news release. The company's net Keflex sales in 2005 were $4.5 million.

Advancis said its current cash position - $27 million of cash, cash equivalents and marketable securities - and anticipated Keflex revenues should provide sufficient funding to support its ongoing pivotal phase 3 trial of Amoxicillin Pulsys and other planned operations through 2006 and into early 2007.

Keflex is a first-generation cephalosporin antibiotic indicated for the treatment of respiratory tract infections, otitis media, skin and skin structure infections, bone infections and genitourinary tract infections.

Advancis is a pharmaceutical company based in Germantown, Md., that develops and commercializes pulsatile drug products that fulfill substantial unmet medical needs in the treatment of infectious disease.

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