Transition, Elan to modify collaboration agreement for development, commercialization of ELND005

Transition Therapeutics Inc. ("Transition" or "Company") (TSX:TTH) (Nasdaq:TTHI) today announced that the Company and Elan Corporation, plc ("Elan") (NYSE:ELN) have mutually agreed to modify their collaboration agreement for the development and commercialization of ELND005.

Under the terms of the modification, in lieu of a contractually required Phase 3 milestone payment, Transition will receive from Elan a payment of US$9 million at the time of signing and will be eligible to receive a US$11 million payment upon the commencement of the next ELND005 clinical trial.  Transition also will be eligible to receive up to an aggregate of US$93 million in additional regulatory and commercial launch related milestone payments plus tiered royalties ranging from 8% to 15% based on net sales of ELND005 should the drug receive the necessary regulatory approvals for commercialization.  

As the agreement is now a royalty arrangement, Transition will no longer fund the development or commercialization of ELND005 and will relinquish its 30% ownership of ELND005 to Elan.