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Cytogen to buy Quadramet royalties from Berlex
By Elaine Rigoli
Tampa, Fla., May 8 - Cytogen Corp. has entered into a royalty buyout agreement with Berlex, Inc. for Quadramet (samarium Sm-153 lexidronam injection), a pain reliever for patients with confirmed osteoblastic metastatic bone lesions.
Under the agreement, Cytogen will no longer pay Berlex a royalty on Quadramet sales in exchange for a one-time cash payment of $6 million and the issuance of 623,441 shares of Cytogen common stock at a price of $3.21 per share to Berlex, according to a news release.
The transaction is subject to certain closing conditions and is expected to close within 90 days.
As additional consideration, Cytogen will also pay Berlex one-time, sales-based milestone payments of $3.34 million and $5.01 million the first time net sales of Quadramet in the U.S. territory reach $20 million and $30 million, respectively, in any 12-month period, the release said.
The two sales-based milestone payments will be made in four equal quarterly installments.
"By eliminating the previous Berlex royalty structure, this transaction will increase our gross margin for Quadramet and provide additional strategic and financial value for Cytogen and our stockholders," said Michael D. Becker, president and chief executive officer of Cytogen, in a statement.
"The agreement also underscores our conviction in the long-term prospects for this novel therapeutic agent, which is currently being evaluated for new indications in numerous clinical studies at prestigious institutions."
Berlex is a specialty pharmaceutical company with headquarters in Montville, N.J.
Cytogen is a biopharmaceutical company based in Princeton, N.J.
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