Under the terms of the option agreement, Cephalon will pay ImmuPharma a $15 million upfront option payment. If the Phase IIb studies are successful and if the option is exercised then the parties enter into an exclusive worldwide license agreement and ImmuPharma will receive a one-time license fee, milestone payments upon the achievement of regulatory milestones and royalties on commercial sales of Lupuzor.
The various milestone payments which include sales milestones may total up to $500 million. Upon exercise of the option, Cephalon will assume all expenses for Phase III studies and subsequent commercialization of the product.
ImmuPharma is now conducting a large Phase IIb study of Lupuzor in patients in Europe and Latin America.
Frank Baldino, Jr, chairman and CEO of Cephalon, said: We are excited about entering another specialty market and the potential Lupuzor presents for us to further diversify our product portfolio and to bring the first specific medication for the treatment of lupus to patients living with this chronic, potentially life-threatening disease. Our current cash position has created the opportunity to make this type of deal, which helps to position Cephalon and our pipeline for longer term growth.