DOR BioPharma, Inc has signed a potential $30 million partnering agreement with Sigma-Tau Pharmaceuticals, Inc (Sigma-Tau) for the development and commercialization in North America of orBec (oral beclomethasone dipropionate or Oral BDP).
As part of the agreement, Sigma-Tau will make a $6 million upfront investment in DOR, inclusive of the $1.5 million which was recently completed under a letter of intent dated November 26, 2008. The remaining $4.5 million investment was priced at a 50 per cent premium to the five day trailing average of DOR stock, putting the investment price at $0.18 per share. In addition, Sigma-Tau will make payments to DOR totalling $10 million, subject to the achievement of certain milestones.
The first of these, a $1 million payment, will be made upon the enrolment of the first patient in DOR's upcoming confirmatory phase-3 clinical trial of orBec for the treatment of acute gastrointestinal Graft-versus-Host disease (GI GVHD), which is expected to occur in the first half of 2009. In exchange for commercialization rights, Sigma-Tau will pay DOR a 35 per cent royalty on net sales pursuant to which DOR will supply the drug product while maintaining worldwide manufacturing rights.
Commercialization expense, including launch activities, could potentially reach $15 million by the end of the first year after launch. Additionally, DOR will grant Sigma-Tau a seat on its board of directors.
Gregg Lapointe, chief executive officer of Sigma-Tau, commented, "As a result of our longstanding relationship with DOR, we have great confidence in the DOR team, in the pharmacology that orBec has already demonstrated, and in the likelihood of orBec's success in the confirmatory phase-3 clinical programme. Oral BDP is also an excellent fit with our current pipeline of transplant/oncology products. We are committed to the success of this collaboration in the development of this important compound."
"We are very pleased to begin this partnership with Sigma-Tau," said Christopher J Schaber, president and CEO of DOR. "Sigma-Tau's premium investment in DOR shares gives us the cash necessary to complete our upcoming confirmatory phase-3 clinical trial of orBec in GI GVHD. This partnership will also provide for the launch and commercialization of orBec in North America, without any further related expense to DOR or its shareholders. It also provides us with the potential for ongoing development funding across multiple indications for orBec and oral BDP."