PDI, a healthcare commercialization company, signed a collaboration agreement with an unnamed molecular diagnostics company to commercialize that firm’s tests. The initial test to be commercialized is fully developed.
PDI paid its new partner an initial fee of $1.5 million and has received an option to purchase the company. The option price is dependent on the achievement of certain milestones during the collaboration and could be up to $6 million if all milestones are achieved at their maximum levels.
If PDI purchases the company, in addition to the option price based on the achievement of milestones, beginning in 2015, PDI would pay a royalty of 7% on annual net revenue up to $50 million, with escalating royalty percentages for higher annual net revenue capped at 11% for annual net revenue in excess of $100 million.
“As we have previously stated, we have been pursuing commercialization opportunities for products aimed at adding more predictable, higher growth, higher margin businesses that can leverage the substantial full commercialization capabilities of PDI,” said Nancy Lurker, CEO of PDI.
“For competitive reasons, at this time, we are not disclosing the name of our collaboration partner or the area of focus of the initial test we plan to launch. What we can say is that we believe the core technology of the test is unique and sound, the value to the health care system is potentially significant, the clinical value to patients is compelling, the accuracy of the test is high, and reimbursement from both private and public payors is expected to be very attractive,” Lurker concluded.
Last year, PDI signed several multimillion dollar sales services contracts, including one to promote a CNS therapeutic product to neurologists and pain specialists and another targeting primary care physicians, pediatricians, and psychiatrists.