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A Cardiovascular Sales Force in Exchange for Royalties and Warrants
Situation
Kos Pharmaceuticals, Inc., then an all-cap, public pharmaceutical company, needed to invest in the launch of Advicor®, a novel cholesterol-lowering product, despite limited cash resources, a developing sales infrastructure and the need to keep an eye on near-term earnings.
Solution
NovaQuest's predecessor, PharmaBio Development, funded a dedicated sales force of 150 experienced Innovex cardiovascular representatives for two years, in return for a five-year royalty on the net sales of Advicor and its predecessor product, Niaspan®. PharmaBio also received warrants to purchase shares of Kos Pharmaceuticals stock.
Value Added
Kos immediately increased the strength of its Advicor and Niaspan sales infrastructure, deferred near-term expenses associated with the sales force, and kept a large share of the financial value of its Advicor and Niaspan cardiovascular franchise.
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