Hikma Pharmaceuticals has entered into a settlement agreement with Jazz Pharmaceuticals, that resolves patent litigation related to Jazz's Xyrem (sodium oxybate) oral solution, 500mg/mL product.

Under the settlement agreement, Jazz will grant Hikma and its wholly owned subsidiary, West-Ward Pharmaceuticals, the right to sell an authorised generic (AG) of Xyrem in the US market commencing on 1 January 2023 or earlier under certain circumstances. The AG product will be marketed through the Xyrem Risk Evaluation and Mitigation Strategy (REMS) programme. The initial term of the AG arrangement is 6 months and Hikma has the option to extend the AG term for up to a total of 5 years. Jazz has also granted Hikma a licence to market generic sodium oxybate pursuant to its ANDA at the end of the AG term.

Hikma will pay Jazz a royalty on net sales of the AG product, but will initially retain a meaningful percentage of net sales. Hikma will also pay for the supply of the AG product and will reimburse Jazz for a portion of the service costs associated with the operation of the Xyrem REMS and distribution of the AG. The royalty rate paid to Jazz will increase should the AG term be extended beyond one year.  Specific financial and other terms related to the settlement agreement are confidential.

In its 2016 Annual Report, Jazz reported net sales of Xyrem of approximately $1,108 million in 2016.

Hikma, through its wholly owned US subsidiary, Roxane Laboratories, was the first ANDA applicant to submit a substantially complete ANDA with Paragraph IV certification for sodium oxybate oral solution, 500 mg/mL and therefore is eligible for 180 days of generic drug exclusivity.

Mike Raya, CEO of West-Ward said: "We are very pleased to have reached an agreement with Jazz with terms that are favourable for both parties. Sodium oxybate is an exciting product in our pipeline and supports our strategy of developing a differentiated product portfolio to drive sustainable growth for our US business."