Jul 30 2011
- Labopharm to Transfer OLEPTRO™ to Angelini for U.S., Canada and Other Countries Globally in Exchange for a Royalty -
Labopharm Inc. (TSX: DDS) and Gruppo Angelini (Angelini), its partner in the joint venture established by the two companies to commercialize OLEPTRO™ in the U.S., today announced that they have entered into an agreement to restructure their partnership. Labopharm and Angelini have agreed to terminate their existing agreements and Labopharm will grant Angelini an exclusive license and rights related to OLEPTRO™ in the U.S., Canada and other countries globally in exchange for a royalty on product sales. As a result of the partnership restructuring, Labopharm will no longer be responsible to fund Angelini Labopharm LLC (Angelini Labopharm), the joint venture established by the two companies to commercialize OLEPTRO™ in the United States. OLEPTRO™ will continue to be available in the United States.
"We believe that OLEPTRO™ is a valuable product for the treatment of depression and the restructured partnership provides us with the opportunity to benefit financially from the success of this product while enabling us to further preserve capital as we continue to progress with the strategic review process," said Mark A. D'Souza, President and Chief Executive Officer, Labopharm Inc.
Under the terms of the new agreement, the two companies will terminate the existing joint venture agreement and ancillary agreements established in May 2010 and dismantle the joint venture such that Labopharm will transfer its 50% ownership interest in Angelini Labopharm to Angelini.
Labopharm will receive a royalty of 5% on net sales of OLEPTRO™ in the United States in excess of US$10 million in any calendar quarter. Net sales of OLEPTRO™ in the United States for the most recent quarter ended March 31, 2011 were $908,000. In addition, Labopharm will receive a royalty of 5% on net sales of OLEPTRO™ in those countries for which it is granting rights to Angelini, including Canada, where OLEPTRO™ has received regulatory approval, and other countries globally, for which Angelini does not already have the commercialization rights. As a result of the restructured agreement, Angelini would be the sole owner of all commercialization rights related to OLEPTRO™ globally.
As part of the restructuring of the joint venture, Labopharm will grant to Angelini an exclusive license and rights to commercialize Labopharm's twice-daily acetaminophen product in all European Union countries, Turkey, Georgia and the Commonwealth of Independent States (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan). Labopharm will receive a royalty of 5% on net sales of its twice-daily acetaminophen product in the aforementioned countries. Labopharm will also receive milestone payments upon signing of the agreement and the achievement of an agreed sales milestone.
All transactions are expected to close in the coming weeks and are subject to closing conditions customary to such transactions.