Pernix Therapeutics, a specialty pharmaceutical company, has signed an agreement with GlaxoSmithKline to acquire the U.S. rights to Treximet (sumatriptan / naproxen sodium) for the acute treatment of migraine attacks with or without aura in adults.

Doug Drysdale, chairman, president and CEO of Pernix, said, “The acquisition of Treximet further accelerates the transformation of Pernix into a specialty pharmaceutical company and expands our portfolio of CNS brands, Silenor and Khedezla. With the strong presence Pernix is establishing in the adjacent psychiatric market, this acquisition provides Pernix an opportunity to expand the company’s reach and penetration into the very important neurology space.”

Pernix will make an upfront payment to GSK of $250 million. The company will purchase existing inventory from GSK and GSK will continue to manufacture Treximet in the near future under a long-term Supply Agreement with Pernix. The company expects the transaction to close and to transfer Treximet no later than Aug. 1, following Hart Scott Rodino approval and closing of financing by Pernix. The company will continue to make royalty payments on net sales of the product. The transaction will be financed through a combination of cash, debt and equity-linked or other securities.

Pernix also plans to seek an extension of the exclusivity of Treximet with the first ever pediatric indication (aged 12 to 17) for any sumatriptan treatment, expected to file by the end of 2014, as well as additional life-cycle opportunities that currently are being explored. Pernix will pay GSK additional consideration of $17 million upon receipt of updated FDA Written Request for pediatric exclusivity.

Pernix will complete the filing for a pediatric indication for Treximet and undertake certain new activities to extend the product’s life. In addition, Pernix will release restrictions on Pozen’s right to develop and commercialize additional dosage forms of sumatriptan/naproxen combinations outside of the U.S.

GSK will assign to Pernix the Product Development and Commercialization Agreement between GSK and Pozen. Pozenand Pernix will amend the PDC Agreement to facilitate further development of Treximet. Pernix shall make a payment of $3 million to CPPIB Credit Investments and also has granted Pozen a warrant to purchase 500,000 shares of Pernix common stock at an exercise price equal to the closing market price on May 13. The warrants will be exercisable from the closing date of the transaction until February 2018.

The amended PDC Agreement provides for royalties of 18% of net sales with quarterly minimum royalty amounts of $4 million for Jan. 1, 2015 through March 31, 2018.

Treximet was first approved by the FDA in April 2008 for the acute treatment of migraine attacks, with or without aura, in adults. The product is formulated with Pozen’s patented technology of combining a triptan with a non-steroidal anti-inflammatory drug and GSK’s RT Technology. Treximet has been shown to provide superior sustained pain relief compared to placebo and to both of the single mechanism of action components.

In clinical trials, Treximet provided a significantly greater percentage of patients migraine pain relief at two hours compared to sumatriptan 85mg or naproxen sodium 500mg alone. In addition, Treximet provided more patients sustained migraine pain relief from two to 24 hours compared to the individual components.