EKR Therapeutics, Inc. and PDL BioPharma, Inc. have entered into an agreement under which EKR would acquire the rights to PDL's cardiovascular products and under the the agreement PDL would receive cash payments of $85 million.
EKR Therapeutics, Inc. and PDL BioPharma, Inc. have entered into an agreement under which EKR would acquire the rights to PDL's cardiovascular products, consisting of Cardene® I.V. (nicardipine hydrochloride), Cardene SR® and new formulations of Cardene in development, as well as Retavase® (reteplase) and the development product ularitide. Under the terms of the agreement, PDL would receive cash payments of $85 million at closing, up to an additional $85 million in development and sales milestones for the new Cardene formulations, as well as royalties on sales of the new Cardene formulations and ularitide.
EKR would acquire all rights to the cardiovascular products, including related trademarks, patents, intellectual property, product inventory and other related assets. EKR expects to hire a number of PDL's commercial employees in support of the expanded product portfolio associated with this acquisition. In addition, EKR will focus all development efforts on the launch of the new Cardene formulations and will not pursue additional development for the product in pediatric patients. PDL and EKR agree that the long-term value of the Cardene franchise can be both well protected and substantially enhanced by strategically focusing lifecycle management programs on the high growth potential of new formulations for the product.
In addition to the $85 million cash payment at closing, the agreement provides for potential milestones and royalties payable to PDL. PDL would receive a $25 million milestone upon the approval of a new formulation of Cardene, which PDL anticipates will occur well in advance of the November 2009 Cardene I.V. patent expiry. Two additional milestones of $30 million each would be payable upon achievement of $80 million and $150 million of annual net product sales of the new Cardene formulations. EKR also would pay PDL royalties of ten percent and five percent on future net sales of the new Cardene formulations and ularitide, respectively.
The transaction has been approved by the boards of directors of both companies and is expected to close during the first quarter of 2008, subject to antitrust clearance under the Hart-Scott-Rodino Act and satisfaction of financing-related and other customary conditions.