The financial terms of the license agreement consist of an up-front license fee payment to be made by Alphatec to Progressive; testing, design, regulatory and sales milestone payments that could begin to be achieved and paid by Alphatec to Progressive in 2008 and a royalty payment based on net sales of licensed products, with minimum annual royalties beginning in 2009.
The exclusive license agreement expires in 2027. Alphatec Spine has the right to sublicense the technology to third parties as well as terminate the license agreement for convenience upon 90 days prior written notice to Progressive. Each party has the right to terminate the license agreement for a material uncured breach by the other party.
The technology, which Alphatec Spine will jointly develop with Progressive, is a pedicle screw that is designed to be implanted into the pedicle and then expanded to achieve increased purchase if the surgeon desires a more secure fixation.
Dirk Kuyper, president and CEO of Alphatec, said: “This product provides a revolutionary and unique solution to the spine surgeon in dealing with patients with poor bone quality.”