Mallinckrodt, Palatin Sign Binding Agreement to Market LeuTech,
PLTN.O>[MKG-news]
Mallinckrodt, Palatin Sign Binding Agreement to Market LeuTech, Palatin's Infection Imaging Agent; Palatin Receives $13.5 Million in Initial Payments ST. LOUIS--(BUSINESS WIRE)--Aug. 17, 1999--Mallinckrodt Inc. [MKG-news] and Palatin Technologies [PLTN-news] of Princeton, N.J., Tuesday announced that they have executed an agreement under which Mallinckrodt has licensed LeuTech(TM), Palatin's first commercial product. LeuTech is a radiolabeled monoclonal antibody for diagnosing infections. The product comes in a kit and is injected into a patient's vein. The labeled antibody attaches onto white blood cells that collect at the site of an infection. A picture is then taken with a common piece of hospital equipment called a gamma camera, which allows a doctor to locate where the infection is occurring. All this can occur in 90 minutes. The initial indication the company studied was for the diagnosis of equivocal (hard to diagnose) appendicitis with more than 250,000 cases each year in the United States alone. The company anticipates that LeuTech's efficacy gives it the potential to become a "gold standard" for such cases as well as other indications that the company is currently studying. Physicians involved in the clinical trials believe the product will improve the quality of patient care and reduce costs. Under the agreement signed yesterday, Mallinckrodt paid to Palatin a licensing fee of $500,000 and an additional $13 million to purchase 700,000 restricted unregistered shares of Palatin preferred stock. This conversion to common stock translates into a price for the common stock that is approximately three and a half times the current trading range of Palatin common shares. Milestone payments of an additional $10 million will be paid on FDA approval of the first LeuTech indication and on attainment of certain sales goals following product launch. Mallinckrodt will also reimburse Palatin for 50 percent of all ongoing LeuTech development costs. Palatin will manufacture LeuTech and receive a transfer price on each product unit and a royalty on LeuTech net sales. Palatin Chairman and Chief Executive Officer Edward J. Quilty said, "This agreement is the major milestone in the company's history. We are delighted to have Mallinckrodt as our partner and believe they will continue to be the dominant imaging company and their 500 plus person sales force will clearly ensure the product's success once LeuTech is introduced to the market." Bradley J. Fercho, president of Imaging for Mallinckrodt, commented that "Palatin has done an excellent job in rapidly developing this product. We believe that Mallinckrodt's marketing and sales resources will optimize the market opportunity for LeuTech beginning with its initial indication for equivocal appendicitis and follow on indications as they are cleared by the FDA." "LeuTech is a breakthrough as an infection imaging agent," Fercho said. "When it receives FDA approval we anticipate that it will become the standard of care for diagnosing the approximately 250,000 cases of equivocal appendicitis because of the quality of its images and the ease and speed it brings to the process. "We expect that LeuTech will be instrumental in preventing 'missed' diagnoses of appendicitis leading to fewer complications, less days of hospitalization and less liability for doctors and hospitals -- thus saving money for providers and payers and assuring patients of optimum care." Palatin Technologies Inc. is a development-stage medical technology company involved in developing and commercializing products and technologies for diagnostic imaging, cancer therapy and ethical drug development based on its proprietary monoclonal antibody radiolabeling and enabling peptide platform technologies. For further information visit the Palatin Web site at www.palatin.com. For Palatin investor information, visit the Allen & Caron Inc. Web site at www.allencaron.com. Based in St. Louis, Mallinckrodt has three healthcare product groups -- Respiratory, Imaging and Pharmaceuticals. The company operates in more than 100 countries and had fiscal 1999 net sales of $2.6 billion. The Mallinckrodt Web site address is www.mallinckrodt.com. Statements about the companies' future expectations, including product development, regulatory plans, timing of FDA reviews, FDA clearances, sales volumes, market acceptance of products and all other statements in this document other than historical facts, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995. The companies intend that such forward-looking statements be subject to the safe harbors created thereby. Since these statements involve risks and uncertainties and are subject to change at any time, the companies' actual results could differ materially from expected results.
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