MGI PHARMA Announces License Agreement with Cilag GmbH, a Johnson & Johnson Company, for Dacogen(TM) (decitabine) for Injection
Thursday July 6, 7:01 am ET
Ex-North America Development & Commercialization Agreement
[The market was not impressed at all. Maybe the talk about a net single-digit royalty was less than expected. Or maybe there were no expectations, but the single digits disapponted anyhow. I view this as a validation of sorts, however. J&J would not license the drug if they didn't see a potential. Interesting strategy btw from J&J. They did the same thing (licensing ex-USA) with Millennium's Velcade].
MINNEAPOLIS--(BUSINESS WIRE)--July 6, 2006--MGI PHARMA, INC. (Nasdaq:MOGN - News), an oncology and acute care-focused biopharmaceutical company, today announced the signing of a license agreement with Cilag GmbH, a Johnson & Johnson (JNJ) company, granting exclusive development and commercialization rights for Dacogen(TM) (decitabine) for Injection in all territories outside North America to Janssen-Cilag companies, members of the Johnson & Johnson family of companies. Dacogen is a treatment for patients with myelodysplastic syndromes (MDS) which occur when there is a defect in the blood-forming stem cells, resulting in too few and poorly functioning blood cells. Total payments from Cilag GmbH to MGI PHARMA as part of this license agreement, including an upfront payment, potential milestone payments, and research and development support, may exceed $80 million.
"Janssen-Cilag companies have significant commercial, regulatory and development expertise, particularly in oncology," said Lonnie Moulder, President and CEO of MGI PHARMA. "This development and commercialization partnership will help us maximize the commercial potential of Dacogen and bring it to clinicians and patients around the world."
MGI PHARMA and the Janssen-Cilag companies will jointly implement a strategic plan for the global clinical development of Dacogen. Under the terms of this agreement, MGI PHARMA will retain all commercialization rights to Dacogen in North America. Janssen-Cilag companies will be responsible for conducting regulatory and commercial activities related to Dacogen in all territories outside North America, while MGI PHARMA retains all responsibility for all activities in the United States, Canada and Mexico.
Further to the terms of this agreement, MGI PHARMA will receive from Cilag GmbH an upfront payment of $10 million, and may earn milestone payments potentially totaling more than $47 million should all specified clinical development, regulatory, and commercial goals be achieved. Under the terms of the Dacogen license agreement between MGI PHARMA and SuperGen, Inc., the companies will share these upfront and milestone payments from Cilag GmbH.
In addition to the previously described payments, MGI PHARMA will receive from Cilag GmbH research and development support totaling $25 million over the next three years related to specified clinical development activities.
MGI PHARMA will receive a significant double-digit royalty from Cilag GmbH on net sales of Dacogen in each of the countries covered by this agreement. Per its royalty obligation to SuperGen, MGI PHARMA expects to recognize royalty payments in the single digit range for sales of Dacogen outside of North America. |
