Infinity Pharmaceuticals entered into a global strategic alliance with Purdue Pharmaceutical Products and its independent associated company Mundipharma International focused on the research, development, and commercialization of Infinity's early clinical and discovery programs, including IPI-926, Infinity's inhibitor of the Hedgehog signaling pathway.
Mundipharma will participate in Infinity's Hedgehog program as well as new Infinity discovery and development programs for three years, with an option to extend this right for two additional one-year terms. Mundipharma will fund the costs of these programs until the start of the first Phase III trial for the program or December 31, 2013, whichever comes first. If a program commences Phase III studies after December 31, 2013, Infinity and Mundipharma will share the costs of development equally.
Infinity will retain U.S. commercialization rights for all oncology products developed under these programs. Infinity is obligated to pay Mundipharma a royalty on U.S. sales of these products. Mundipharma has the right to commercialize these products outside of the U.S., and is obligated to pay a royalty to Infinity on sales outside of the U.S. Infinity will direct and lead all oncology discovery and development efforts on a worldwide basis.
Purdue has made an equity investment of $45 million in Infinity through the purchase of four million shares of Infinity common stock at $11.25 per share. Subject to Infinity shareholder approval and other customary closing conditions, these entities have agreed to invest an additional $30 million in Infinity to purchase two million shares of Infinity common stock and warrants to purchase up to six million additional shares of Infinity common stock.
In addition, upon the second closing, Purdue will make available to Infinity a $50 million line of credit for any business purpose.
The alliance also encompasses Infinity's FAAH discovery program. Purdue and Mundipharma will have the right to assume development of the FAAH program at the conclusion of Phase I studies by funding the research and development costs of the program through approval and paying a royalty to Infinity on global net sales.
Finally, under the alliance, Infinity grants to Mundipharma an option, on set terms, to participate in programs that Infinity may in-license during the term. Mundipharma will have the right to opt out of development of any particular program on an annual basis, with the first opt-out right becoming available in July 2009 for the Hedgehog and FAAH programs. If Mundipharma elects to opt out of a program, it will be obligated to continue funding that program for an additional year, and have the right to receive royalties on future sales based on the stage of development of the program when the election to opt-out took place.