Item 8.01.
Other
Events
As previously disclosed, on January 8, 2017,
Palatin Technologies, Inc. (“
Palatin
”) and AMAG Pharmaceuticals, Inc.
(“
AMAG
”) entered into a licensing agreement (the
“
License
Agreement
”) in which
Palatin granted AMAG exclusive North American rights to develop and
commercialize Rekynda™ (bremelanotide), an investigational
product designed for on-demand treatment of hypoactive sexual
desire disorder (“
HSDD
”) in pre-menopausal women (the
“
Licensing
Transaction
”). Following
the satisfaction of the conditions to closing under the License
Agreement, the Licensing Transaction closed on February 2, 2017
(the “
Effective
Date
”).
Under the terms of the License Agreement, Palatin
has granted AMAG (i) an exclusive license in all countries of
North America (the “
Territory
”), with the right to grant sub-licenses, to
research, develop and commercialize products containing
bremelanotide (the “
Products
”), (ii) a non-exclusive license in the
Territory, with the right to grant sub-licenses, to manufacture
Products, and (iii) a non-exclusive license in all countries
outside the Territory, with the right to grant sub-licenses, to
research, develop and manufacture (but not commercialize) the
Products.
Pursuant to the terms of and subject to the
conditions in the License Agreement, AMAG is required to make the
following payments to Palatin: (i) $60 million as a one-time
upfront payment within five days following the Effective Date (the
“
Upfront
Consideration
”) and
(ii) up to an aggregate amount of $25 million to reimburse
Palatin for all reasonable, documented, out-of-pocket expenses
incurred by Palatin, following the Effective Date, in connection
with the development and regulatory activities necessary to file a
new drug application (“
NDA
”) for a Product for HSDD in the United
States. Palatin has received the $60 million upfront payment from
AMAG.
In
addition, pursuant to the terms of and subject to the conditions in
the License Agreement, Palatin will be eligible to receive from
AMAG: (i) up to $80 million in specified regulatory payments
upon achievement of certain regulatory milestones, and (ii) up
to $300 million in sales milestone payments based on achievement of
annual net sales amounts for all Products in the
Territory.
AMAG
is also obligated to pay Palatin tiered royalties on annual net
sales of Products, on a product-by-product basis, in the Territory
ranging from the high single-digits to the low double-digits. The
royalties will expire on a product-by-product and
country-by-country basis upon the latest to occur of (i) the
earliest date on which there are no valid claims of Palatin patent
rights covering such Product in such country, (ii) the
expiration of the regulatory exclusivity period for such Product
in such country and (iii) ten years following the
first commercial sale of such Product in such country. Such
royalties are subject to reduction in the event that: (a) AMAG
must license additional third party intellectual property in order
to develop, manufacture or commercialize a Product or
(b) generic competition occurs with respect to a Product in a
given country, subject to an aggregate cap on such deductions of
royalties otherwise payable to Palatin. After the expiration
of the applicable royalties for any Product in a given country, the
license for such Product in such country would become a fully
paid-up, royalty-free, perpetual and irrevocable
license.
AMAG
and Palatin have made customary representations and warranties and
have agreed to certain customary covenants, including
confidentiality and indemnification.
Rekynda
is currently in clinical development and, pursuant to the terms of
the License Agreement, Palatin will continue to conduct the
clinical activities to support the NDA filing that AMAG will
submit, subject to reimbursement as described above. Under the
License Agreement, AMAG is assuming the obligations under
manufacturing and supply agreements with Catalent Belgium S.A. AMAG
is not acquiring any physical assets at closing, but may acquire
remaining inventories of compounds and product from Palatin when
development is completed.
The
License Agreement expires on the date of expiration of all royalty
obligations due thereunder unless earlier terminated in accordance
with the License Agreement. AMAG has the right to terminate
the License Agreement without cause, in its entirety or on a
product-by-product and country-by-country basis upon at least 180
days’ prior written notice to Palatin. Either party may
terminate the License Agreement for cause if the other party
materially breaches or defaults in the performance of its
obligations, and, if curable, such material breach remains uncured
for 90 days.
The
foregoing is only a summary of the material terms of the License
Agreement and does not purport to be a complete description of the
rights and obligations of the parties under such agreement. The
foregoing summary is qualified in its entirety by reference to the
License Agreement, a redacted copy of which will be filed with
Palatin’s Quarterly Report on Form 10-Q for the quarter ended
December 31, 2016.
On
February 3, 2017, the Company issued a press release announcing the
closing of the License Transaction, the receipt of $60 million
upfront payment from AMAG, and announcing a teleconference and
webcast to be held February 9, 2017 at 11:00 a.m. Eastern time,
which will include a discussion on Palatin’s role in further
development and regulatory approval of Rekynda. A copy of the press
release is filed with this Form 8-K and is attached hereto as
Exhibit 99.1.