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news.Abraxis BioScience and ProMetic Life Sciences have signed definitive agreements for the development and commercialization, on a world-wide basis, excluding China and Taiwan, of four biopharmaceutical products targeting underserved medical conditions.
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These represent market opportunities potentially exceeding $600 million in annual revenue for Abraxis. The transaction includes an initial strategic investment, by Abraxis, in ProMetic of $7 million at C$0.47 per share as well as providing Abraxis rights to make optional investments of up to $25 million.
The transaction involves access to ProMetic’s proprietary protein technologies to commercialize the biopharmaceuticals. Abraxis will fund all development costs to regulatory approval. The licensed products will be manufactured by ProMetic and commercialized by Abraxis.
The licensing agreements include up to $8 million to ProMetic in potential development milestone payments; potential sales milestones in excess of $287 million in addition to royalties on the net sales of the four products by Abraxis.
Under a separate service agreement, ProMetic will perform product development activities on behalf of Abraxis, which translates into revenue for ProMetic starting in 2008. The combination of development milestones and service fees could represent revenue totaling $34 million over the next three years for ProMetic.
Additional revenue to ProMetic will result from the manufacturing of products for clinical trial requirements. Beyond that, the revenue opportunity to ProMetic is expected to significantly increase once the products have reached commercial status. Pursuant to the manufacturing agreement, ProMetic will supply Abraxis with bulk active ingredients. Abraxis will then perform the final formulation steps to dosage form for the four biopharmaceutical products.