Pursuant to the agreement, Cipher has granted Ranbaxy Pharmaceuticals (RPI) the exclusive right to market, sell and distribute CIP-Isotretinoin in the US, its territories and possessions.
Under the terms of the agreement with RPI, Cipher received an initial upfront milestone payment of $1 million. The agreement includes additional pre- and post-commercialization milestone payments of up to $23 million, contingent upon the achievement of certain milestone targets.
Once the product is successfully commercialized, Cipher will also receive a royalty in the mid-teens on net sales. In addition, RPI will reimburse Cipher for all costs associated with the clinical studies required to obtain FDA approval, up to a predetermined cap.
Any additional development costs associated with initial FDA approval will be shared equally. Cipher is responsible for all product development activities, including management of the clinical studies required by the FDA to secure new drug application approval.
Cipher is also responsible for product supply and manufacturing, which would be fulfilled by its partner, Galephar Pharmaceutical Research. After product-related expenses are deducted, approximately 50% of all milestone and royalty payments received by Cipher under the agreement will be paid to Galephar.
CIP-Isotretinoin is a novel, patented formulation of isotretinoin, which is used in the treatment of severe nodular acne.
Larry Andrews, president and CEO of Cipher, said: “This agreement provides us with the financial resources to complete CIP-Isotretinoin’s clinical development program while also achieving attractive commercialization terms post-FDA approval.”