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Kythera Biopharmaceuticals, Inc. regained all rights to ATX-101 outside the U.S. and Canada from the HealthCare segment of Bayer (BAYRY - Free Report) . ATX-101 is undergoing late stage development for the reduction of submental fat (double chin).

Kythera will be paying $33 million in the form of its common stock along with a $51 million note payable by 2024. Bayer will also receive certain long-term sales milestone payments on annual sales of the candidate (on approval) outside the U.S. and Canada.

In 2010, Bayer acquired all rights to ATX-101 in markets outside the U.S. and Canada from Kythera for an upfront license fee of around $43 million. Bayer also paid approximately $33 million following positive results from the European phase III clinical studies.

Kythera intends to file a New Drug Application on ATX-101 in the U.S. for the reduction of submental fat in the second quarter of 2014. Regulatory submissions in ex-U.S. countries are expected to be made in the next 12 months.

Upon approval, ATX-101 will enjoy the status of being the first-in-class submental contouring injectable therapy. Regulatory submissions will be made on the basis of positive phase III results reported in the U.S. and EU.

We are encouraged by the deal. Kythera now holds global rights to the late stage candidate, ATX-101. On approval the candidate will compete with other facial aesthetic products and with therapies for the treatment of localized fat. Allergan Inc. (AGN - Free Report) is a well-known company in the facial aesthetic market.

Kythera, a biopharmaceutical company, currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Alexion Pharmaceuticals, Inc. (ALXN - Free Report) . Alexion holds a Zacks Rank #1 (Strong Buy).

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