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news.AEterna Zentaris, a biopharmaceutical company, has signed a definitive agreement to sell to Cowen Healthcare Royalty Partners, its rights to royalties on future sales of Cetrotide covered by its license agreement with Merck Serono.
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On closing, AEterna Zentaris will receive $52.5 million from Cowen Healthcare Royalty Partners (CHRP). In addition, contingent on 2010 net sales of Cetrotide reaching a specified level, AEterna Zentaris would receive an additional payment of $2.5 million from CHRP.
Under the terms of the agreement, if cetrorelix, which is currently in Phase III clinical trials for the treatment of benign prostatic hyperplasia, is approved for sale by European regulatory authorities in an indication other than in vitro fertilization, AEterna Zentaris has agreed to make a one-time cash payment to CHRP in an amount ranging from $5 million up to a maximum of $15 million. The amount which would be due to CHRP will be higher the earlier the product receives European regulatory approval.
RBC Capital Markets acted as exclusive financial advisor to AEterna Zentaris in connection with this transaction. The transaction is expected to close within the next 15 business days.
The licensing agreement between AEterna Zentaris and Merck Serono was signed in 2000 and granted Merck Serono exclusive rights to market, distribute and sell Cetrotide worldwide, with the exception of Japan, in the field of in vitro fertilization.
Juergen Engel, president and CEO of AEterna Zentaris, said: “We are very pleased with this transaction which is in line with our strategy of generating non-dilutive financing through non-core asset monetization. We now expect to end the year 2008 with approximately $50 million in cash, providing us with the financial resources for the continued development of cetrorelix in benign prostatic hyperplasia.”