Would have to rank nbix taking indiplon from dov and flipping it to pfe as one of the best all time bio business development maneuverings...(assuming approval next month!)...
WYE stake lasted longer than I remembered.
NBIX:
NEUROCRINE BIOSCIENCES, INC.
In June 1998, we sublicensed NBI-34060 to Neurocrine on an exclusive, worldwide basis for 10 years or, if later, the expiration of the patent covering either the compound or the marketed product. After payments to our licensor, Wyeth-Ayerst, we are entitled to receive a royalty equal to 3.5% of net sales, if any, and milestone payments of up to approximately $4.7 million. We have received milestone payments consisting of $1.3 million in cash, of which we have
retained $845,000 following required payments to Wyeth-Ayerst, and warrants to purchase 75,000 shares of Neurocrine's common stock, of which we will retain
warrants to purchase approximately 50,000 shares, after payments to Wyeth-Ayerst and transaction-related expenses. We achieved the milestone in November 2001. Neurocrine also purchased shares of our series A preferred stock at an aggregate purchase price of $440,000.
WYE:
If we sublicense a compound to a third party, we are obligated to pay Wyeth-Ayerst 35% of all payments we receive based upon that compound. This payment drops to 25% if a new drug application has been filed by us before the sublicense grant. These payment obligations are subject to minimum royalties of 2.5% of net sales for NBI-34060, ocinaplon and DOV 216,303 and 4.5% of net sales for bicifadine, and minimum milestones of $2.5 million for NBI-34060, ocinaplon and DOV 216,303 and $5.0 million for bicifadine. Our sublicense agreement with Neurocrine and our joint venture with Elan are structured so that we can satisfy these minimum milestone obligations. To the extent DOV Bermuda has not entered into arrangements with third parties, however, any amounts owed to us from our joint venture with Elan will be effectively funded by us to the extent of our interest in DOV Bermuda. If Wyeth-Ayerst terminates the license upon an uncured breach by us, we must transfer all information, data and know-how relating to the products and any government authorizations, in addition to our rights derived from our sublicensees with regard to the products. The agreement expires as to each compound ten years following the launch of each compound in each country. Upon such expiration, with respect to each country we will have a fully paid, royalty-free license with the right to make, use or sell the compounds without any further monetary obligation to Wyeth-Ayerst.
And here's what nbix paid for the wye 2.5% for 10 years...
Neurocrine Biosciences Acquires Wyeth's Indiplon Royalty Stream
SAN DIEGO, Feb. 26 /PRNewswire-FirstCall/ -- Neurocrine Biosciences, Inc. (Nasdaq: NBIX) today announced it has purchased from Wyeth (NYSE: WYE) all of Wyeth's financial interest in indiplon, Neurocrine's late stage clinical development compound for the treatment of insomnia. Neurocrine will now retain all milestone, royalty and other payments on indiplon commercialization that would have otherwise been payable to Wyeth. The transaction also provides Neurocrine ownership and control over the indiplon composition of matter patent which expires in 2020.
The transaction is valued at approximately $95 million, with $50 million payable in cash and $45 million payable in Neurocrine common stock at a 15 day average price preceding the signing of the agreement. The stock will have certain registration rights and otherwise be salable under Rule 144 upon the termination of applicable holding periods.
"The acquisition of the indiplon royalty stream from Wyeth has important strategic value for Neurocrine and its shareholders. This transaction leverages our strong cash and equity currency to bolster future earnings. Our indiplon royalty obligations of six percent are now reduced to three and one-half percent and will be accretive to earnings in our first year of commercialization," said Gary Lyons, President and Chief Executive Officer of Neurocrine Biosciences.
Upon approval of the transaction Wyeth will assign to Neurocrine its license agreement with DOV and all of Wyeth's right, title and interest in and to the indiplon composition patent filed by Neurocrine in Wyeth's name. Wyeth's financial interest in indiplon arises out of a 1998 license agreement between Wyeth and DOV Pharmaceutical, Inc. in which Wyeth licensed the indiplon technology to DOV Pharmaceutical in exchange for milestone payments and royalties on future sales of indiplon.
Neurocrine signed an exclusive license and development agreement with DOV in 1998 for indiplon and all therapeutic indications of this compound. In 2002, Neurocrine entered a worldwide agreement with Pfizer for the development and commercialization of indiplon for the treatment of insomnia.
For the record here's what nbix flipped it for....including an est roughly 30% royalties...
Neurocrine, Pfizer Announce Worldwide Agreement To Develop, Promote Insomnia Treatment
Indiplon in Phase III Development for Multiple Aspects of Insomnia
SAN DIEGO, and NEW YORK, Dec. 19 /PRNewswire-FirstCall/ -- Neurocrine Biosciences, Inc. (Nasdaq: NBIX) and Pfizer Inc today announced a global agreement for the exclusive worldwide development and commercialization of indiplon, Neurocrine's Phase III compound for the treatment of insomnia. In addition, Neurocrine will have the opportunity to detail Pfizer's antidepressant Zoloft(R) (sertraline HCl).
Under terms of the collaboration, which is subject to government approval, Neurocrine will receive an initial payment of $100 million and up to $300 million in milestone payments. Pfizer will fund the ongoing development of indiplon and pay royalties on worldwide sales and co-promotion fees in the United States. The companies will collaborate on the clinical development of indiplon and co-promote the product in the United States; Pfizer will hold an exclusive license to develop and market indiplon outside the United States.
Pfizer also will support the creation of a 200-member Neurocrine sales force to reach psychiatrists and sleep specialists. This sales force will detail Zoloft to U.S. psychiatrists after Neurocrine submits the indiplon New Drug Application to the U.S. Food and Drug Administration, which could be as early as year-end 2003. Following the U.S. launch of indiplon, Pfizer will grant Neurocrine a staged $175 million secured short-term credit facility.
"We are excited to have the world's leading pharmaceutical company as our partner in developing and bringing this important new treatment option to patients," said Gary Lyons, president and chief executive of San Diego-based Neurocrine. "Indiplon has the potential to become the first sleep medication indicated for multiple features of insomnia.
"Further, detailing Zoloft in the United States will allow Neurocrine's new sales force to establish relationships with psychiatrists before the launch of indiplon," he said. "As many patients with sleep disorders also suffer from psychiatric conditions, psychiatrists are key providers of care to these patients."
While the prevalence of insomnia is unknown, surveys suggest that up to 50 percent of adults have difficulty sleeping from time to time. The vast majority of people who regularly suffer from the inability to initiate and maintain sleep are untreated and undiagnosed. Insomnia often has a serious impact on a patient's general health and quality of life, including impaired daytime functioning and decreased work productivity.
Indiplon, which Neurocrine licensed from DOV Pharmaceuticals, is a non-benzodiazepine that acts on a specific site of the GABA-A receptor. Indiplon is being studied in both immediate release and modified release formulations to address the problems of sleep initiation and maintenance as well as middle of the night awakenings.
Data have shown that indiplon is both efficacious and well tolerated in achieving rapid sleep induction without next-day residual effects.
"Getting patients to sleep through the night and awake rested and refreshed is the key objective of treatment," said Hank McKinnell, Pfizer chairman and chief executive officer. "We are very pleased to be able to work with Neurocrine on this innovative treatment option. Indiplon has been shown to address the unmet needs of patients who can't fall asleep as well as those who wake in the night."
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