The initial clinical development of Virulizin under the agreement will be in advanced pancreatic cancer. Under the terms of the agreement, GeneSense will be entitled to receive payments in excess of $10 million upon achievement of various milestone events and royalties that vary from 10-20% depending on achieving of sales of Virulizin and subject to certain other adjustments.
GeneSense has also entered into a service agreement with Zor Pharmaceuticals to assist in the transfer of knowledge and establish a strong foundation for moving forward with the development program for Virulizin. Zor Pharmaceuticals will be responsible for the cost of all the clinical development, regulatory submissions and commercialization of Virulizin in North and South America and Europe. GeneSense will retain rights in all other countries, including Japan, Australia and New Zealand.
In addition, a wholly owned subsidiary of Lorus, Pharma Immune will receive 25% of the initial equity in Zor Pharmaceuticals. Pharma Immune’s equity will not be subject to dilution on the first $5 million of financing in Zor Pharmaceuticals. Thereafter, Pharma Immune has, at its option, a right to participate in any additional financings to maintain its ownership level.