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news.TorreyPines Therapeutics, a biopharmaceutical company, has purchased from Eli Lilly & Company a reduction in certain royalty amounts that may become payable to Eli Lilly on net sales of TorreyPines's clinical-stage compounds NGX426 and tezampanel, should either or both gain regulatory approval.
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Specifically, the top tier royalty rate will be reduced three percentage points and the middle tier royalty rate will be reduced one half percentage point. The bottom tier royalty rate will remain unchanged. In addition, certain milestone payments due to Eli Lilly related to the clinical development of NGX426 will be delayed from what was originally agreed.
In exchange for the royalty rate reduction and change in milestone payment timing, TorreyPines issued to Eli Lilly 200,000 shares of TorreyPines common stock at fair market value. TorreyPines originally licensed NGX426 and tezampanel from Eli Lilly in April 2003.
Ev Graham, CEO of TorreyPines, said: “This agreement with Eli Lilly is another important part of our 2008 strategic plan to strengthen the company and build stockholder value. We believe the royalty rate reduction and delay in certain clinical milestone payments for NGX426 will further enhance the commercial value of NGX426 and tezampanel.”