* Meda's Elidel, licensed to Valeant, was sold via Philidor
* Valeant sees dermatology disruption after cuts Philidor
ties
* Elidel royalties to be based on actual sales from 2016
By Carl O'Donnell and Sven Nordenstam
NEW YORK/STOCKHOLM, Nov 13 (Reuters) - Future royalty levels
for one of Swedish drugmaker Meda's MEDAa.ST most important
drugs are uncertain after Meda confirmed to Reuters on Friday
that its eczema cream Elidel was sold in the United States by
pharmacy Philidor, which is due to cease operations by the end
of January.
The licensing rights for Elidel in North America are held by
Canada's Valeant VRX.TO , which is cutting its ties with
Philidor after scrutiny of its business practices and now faces
disruption to its dermatology business. ID:nL1N135104
Meda executives initially said at an earnings call last week
that they were not aware of Meda products being sold through
Philidor. However, a Philidor training manual reviewed by
Reuters shows that Elidel and cold sore cream Xerese were sold
through the speciality pharmacy.
A former Philidor employee who declined to be identified
told Reuters that Elidel was one of its biggest products.
"Valeant has informed us that less than 20 percent of sales
of those products licensed to them have been distributed by
Philidor in the United States," Meda spokeswoman Paula Treutiger
told Reuters in response to questions over Philidor sales of its
products but declined to comment on any potential impact on Meda
from Valeant's break with Philidor.
Representatives of Valeant and Philidor were not immediately
available for comment.
Valeant does not report sales figures for Elidel and Xerese
separately but has said that Philidor has accounted for about 7
percent of its total sales and that it was almost entirely
focused on dermatology products.
Meda has received a guaranteed level of royalties from
Valeant for its products but only until the end of this year,
after which it will receive a percentage of actual sales, the
company said at last week's earnings call.
Valeant, which expects "significant" short-term disruption
in its dermatology business after it cuts ties with Philidor,
said it aims to put a new program in place within 90 days for
selling its dermatology products.
The company expects the dermatology business to recover
during the second half of next year, it added.
Meda said it had received about $10 million of royalties
from Valeant in the third quarter of the year, equal to more
than half of its 156 million Swedish crowns ($18 million) of
pretax profit in the quarter.
Elidel was Meda's fourth-biggest seller globally in 2014.
Sales outside North America amounted to 403 million crowns in
January to September this year.
The drug is sold in 90 markets globally, either by Meda
itself or through partners. In the United States, Canada and
Mexico, Elidel is licensed to Valeant.
In the first nine months of this year, Meda, which has a
market capitalisation of $4.4 billion, had sales of 14.6 billion
Swedish crowns and earnings before interest, tax, depreciation
and amortisation (EBITDA) of 4.9 billion crowns.
($1 = 8.6569 Swedish crowns)
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Drugmaker Valeant to feel sting of closing controversial
pharmacy ID:nL1N135104
INSIGHT-Valeant played a key role in building, operating
Philidor RX ID:nL1N1361N7
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(Editing by Ben Hirschler and David Goodman)