Just two days after licensing to Baxter International rights for all potential indications of MM-398 (also called PEP02; nanoliposomal irinotecan injection or “nal-IRI”) outside the U.S. and Taiwan for up to $970 million, Merrimack Pharmaceuticals has restructured its planned payments to the company from which it originally bought rest-of-Asia and European rights to the cancer drug candidate in 2011 at a price of more than $220 million.
Under a new amendment to their 2011 licensing deal agreed upon by both companies, Merrimack will pay PharmaEngine—which still holds rights to the compound for Taiwan—$7 million upfront and a guaranteed $5 million once MM-398’s NDA is accepted by the FDA. That’s a change from the companies’ earlier agreement, which tied the $5 million to Merrimack winning unspecified “regulatory designations” from the agency.
The maximum amount of sublicense revenue to be received by PharmaEngine for future regulatory and approval milestones will be reduced to $39.5 million by speeding up a planned reduction in the percentage of sublicense revenue to be paid out by Merrimack.
PharmaEngine is also excluded from receiving sublicense revenue related to Merrimack’s upfront payment and up to $150 million in development milestone payments from Baxter. However, Merrimack agreed to pay as planned the remaining $200 million of regulatory and sales milestone payments as well as tiered royalties to PharmaEngine.
PharmaEngine is eligible to receive up to a total of $251.5 million, in addition to license fees of $15 million Merrimack previously paid under their agreement.
“This win-win partnership provided PharmaEngine with short term cash payments of $12 million; mid-term investment of additional clinical trials by the two partners; and long-term upside of market access by Baxter which has global presence in the healthcare industry,” Grace Yeh, Ph.D., PharmaEngine’s president and CEO, said in a statement.
PharmaEngine licensed the development, manufacturing and commercialization rights of PEP02 in Asia and Europe to Merrimack for $220 million plus royalties and sublicense revenue in May 2011.