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Three years after attmepting to go public, Prestwick Pharmaceuticals Inc. has succumbed to a $100 million cash acquisition by Biovail Corp. that gives venture firms less than they invested.

Washington-based Prestwick, a provider of drugs for neurological conditions, formed in 2002 and raised capital from Atlas Venture, Pequot Ventures, Scale Venture Partners, Sofinnova Ventures, Vivo Ventures, Warburg Pincus, and others.

Prestwick officials did not respond to requests for comment, and representatives from these venture firms were not available Wednesday. It was not immediately clear exactly how much capital Prestwick raised. In press releases from 2003 to 2006, Prestwick announced raising a $15 million Series A, a $37 million Series B and a $60 million Series C, in which $30 million came upfront and $30 million would be paid upon completion of undisclosed milestones.

In August 2007 VentureWire reported that Prestwick had taken in $20 million more from insiders in a financing that was not connected to its most recent round, the Series C. Prestwick filed to go public in April 2005 but withdrew its registration in December of that year, citing market conditions.

Biovail's deal comes after Prestwick announced in August that it had gained U.S. marketing approval for Xenazine, a treatment for chorea associated with Huntington's disease. Chorea, which affects 90% of patients, is characterized by excessive and involuntary movements.

Xenazine was granted Orphan Drug designation by the Food and Drug Administration, giving the product seven years of market exclusivity in the U.S. Xenazine is the first FDA-approved treatment for any symptom of Huntington's disease.

Acquiring Prestwick gives Biovail access to this drug and helps the Toronto company move into the neurological-drug market. Biovail Chief Executive Bill Wells said the deal represents a first step in terms of acquiring drugs that fit the company's strategy in this field.

"When we originally laid out our strategy, we said we'd develop four to five products in this specialty neurology space, and the first would come to market in 2012," Wells said. "By doing this deal, we're going to have our first specialty neurology product in the market by the end of the year. So we have accelerated the strategy and I think that's a very good use of our cash."

Wells declined to disclose the company's sales projections for the drug. In Canada, the drug has been available for 12 years and is approved for Huntington's as well as movement disorders, Wells said.

In addition to Xenazine, the acquisition gives Biovail access to early-stage Prestwick products, including Lisuride Sub Q for advanced Parkinson's disease, Lisuride Patch for Parkinson's disease, and D-Serine for schizophrenia.

Prestwick recently entered into a supply and marketing agreement with Ovation Pharmaceuticals Inc. for Xenazine in the U.S. Following Biovail's acquisition of Prestwick, Biovail will supply the product to Ovation for a variable percentage of the product's annual net sales. For net sales up to $125 million, Biovail's supply price will be 72% of net sales. Beyond $125 million, Biovail's supply price will be 65% of net sales.

-With reporting by Andy Georgiades and Judy McKinnon

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