MiddleBrook enters into agreement with Deerfield Management

Under the terms of the agreement, $7.5 million will be immediately received by the company with an additional $2.5 million to become available, if the company receives FDA approval of Amoxicillin Pulsys, a treatment for bacterial infections. The agreement will provide financial flexibility to the company for ongoing strategic discussions beyond the PDUFA date for Amoxicillin Pulsys.

The cash provided from the Deerfield agreement will also allow MiddleBrook to repay in full its outstanding loan facility with Merrill Lynch and eliminate the associated interest and principal payments.

At the transaction closing, MiddleBrook sold certain assets, and assigned certain intellectual property rights, relating only to its existing cephalexin business, excluding cephalexin Pulsys, to Deerfield for $7.5 million, less a $500,000 payment to Deerfield. Pursuant to a consignment of those assets and license of those intellectual property rights back to the company, the company will continue to operate its existing cephalexin business, subject to royalty payments to Deerfield of 20% of net sales, which declines to a single digit royalty as the agreement matures.