Actavis, a Dublin, Ireland-based global specialty pharmaceutical company, has been granted an exclusive option to acquire Rhythm subsidiary Rhythm Health, a Boston, Mass.-based biopharmaceutical company developing relamorelin (RM-131), a peptide ghrelin agonist, for the treatment of diabetic gastroparesis and other GI functional disorders.

Rhythm has completed a successful phase II trial of relamorelin for the treatment of diabetic gastroparesis and a second successful phase II trial for chronic constipation. Rhythm expects to initiate a phase IIb clinical trial for the treatment of diabetic gastroparesis by early 2015.

Actavis will provide a $40 million upfront payment to Rhythm, and will have the option to acquire Rhythm Health and the worldwide rights to relamorelin for an undisclosed amount following the completion of the phase IIb study. Actavis and Rhythm will establish a joint development committee to oversee the development of relamorelin, with Rhythm managing all aspects of the development program during the option period.

The transaction is limited to the acquisition of Rhythm Health and does not include Rhythm's other subsidiary, Rhythm Metabolic, which is developing the MC4R peptide agonist RM-493 for the treatment of obesity, including obesity caused by genetic deficiencies in the MC4 pathway such as Prader Willi syndrome.

"The option to acquire Rhythm Health and its relamorelin development candidate demonstrates our commitment to identify unique opportunities and, through innovative business initiatives, expand our potential product franchises in core therapeutic categories," said David Nicholson, senior vice president, global brands R&D, Actavis. "Relamorelin has the potential to be a significant new advance in the treatment of gastroparesis and other GI functional disorders where there is an urgent need for better therapies, particularly drugs like relamorelin that have a prokinetic mechanism of action.”