XenoPort Launches Regnite in Japan

XenoPort, Inc. (XNPT - Snapshot Report) and Astellas Pharma Inc. recently announced the launch of Regnite extended-release tablets in Japan for the treatment of moderate-to-severe primary restless legs syndrome (RLS).

The Japanese Ministry of Health, Labor and Welfare approved the drug in January 2012. In its press release, the company stated that there are around 2.1 million people with RLS in Japan.

We note that in December 2005, XenoPort had entered into a licensing agreement with Astellas for the exclusive rights to develop and commercialize Regnite in Japan, Korea, the Philippines, Indonesia, Thailand and Taiwan.

XenoPort has received $65 million to date under the collaboration agreement and is entitled to receive additional milestone payments of $20 million. The company is also eligible to receive royalties on a percentage basis on net sales of Regnite in the Astellas territory.

In addition, XenoPort and GlaxoSmithKline plc (GSK - Analyst Report) co-develop and co-promote the drug in the US under the trade name of Horizant. Recently, it was approved by the US Food and Drug Administration (FDA) for the management of postherpetic neuralgia (PHN) in adults.

Horizant is already approved in the US for the treatment of moderate-to-severe primary restless legs syndrome (RLS) in adults. However, the product is not recommended for use in patients who are required to sleep during the day and remain awake at night. Glaxo recorded approximately $1.3 million in Horizant sales in the first quarter of 2012.

Our Recommendation

We currently have a Neutral recommendation on XenoPort. The stocks carry a Zacks #3 Rank (Hold rating) in the short run.