XTL Biopharmaceuticals entered into an asset purchase agreement with Bio-GAL for the rights to a use patent on the recombinant erythropoietin, rHuEPO, to develop a treatment for multiple myeloma. XTL will issue ordinary shares just under 50% of the current issued and outstanding share capital of the company.
Bio-GAL will receive a milestone payment of $10 million upon the successful completion of a Phase II trial and 1% in royalties on net sales of the product. XTL's board of directors reserves the right to issue additional ordinary shares to Bio-GAL in lieu of the milestone payment.
The transaction is expected to close in the second or third quarter. Erythropoietin is used as a therapeutic agent in kidney disease and cancer-related anemia. It is produced by recombinant DNA technology in mammalian cell culture.