Here's some more color on their remaining royalty - down from 15% to 14%:
>>Cubist Pharma To Issue Eli Lilly $8 Million In Stock
Wednesday July 2, 9:37 am ET
LEXINGTON, Mass. -(Dow Jones)- Cubist Pharmaceuticals Inc. (NasdaqNM:CBST - News) traded Eli Lilly & Co. $8 million in newly issued stock for a 1% reduction in the royalties payable to Lilly on sales of its Cidecin antibiotic.
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In a press release Wednesday, Cubist said the deal will price the stock at its average closing price over 20 consecutive trading days ending July 18.
Cidecin is currently under priority review by the U.S. Food and Drug Administration (News - Websites).
Cubist currently has about 29.6 million shares outstanding. Were the stock valued at Tuesday's closing price of $10.65 a share, the deal would give Lilly 751,174 shares, or an about 2.5% stake in the biopharmaceutical company.
Cubist has market capitalization of about $319.7 million.
A Cubist Pharmaceuticals spokesman later said its royalty agreement is a very complicated one, with several regional variations, but that a good general estimate would now put Lilly's average royalty on Cidecin sales at 14%, compared with previous company estimates of 15%.
He said the FDA now plans to issue a decision on the drug by Sept. 20, after the date was recently pushed back to allow Cubist to reformat some digital data sets that the FDA's analysis program had technical difficulties interpreting.
He said the company doesn't yet have any estimates it is willing to release for its expected sales of the antibotic, were it to be approved.
Cubist recently traded on Nasdaq at $10.78, up 38 cents, or 3.6%, on composite volume of 121,798 shares. Average daily volume is 425,271 share<<
BTW, I am guessing that this buy-down was built into the original agreement and is not some newly negotiated deal.
Peter |
