Terms include 5% annual interest, which will be offset by milestone fees.
Octapharma is providing a C$4.5 million advance to ProMetic Life Sciences on a long-term prion-capture resin supply agreement, which was signed in December 2008. The advance will bear 5% interest per annum and is to be offset against payments related to future supplies of products to Octapharma.
Under the terms of the original deal, ProMetic, through its U.K. subsidiary, ProMetic BioSciences, agreed to give Octapharma access to one of its affinity adsorbents for incorporation into the company’s manufacturing process. The agreement was estimated to be worth up to $35 million over six years.
Today’s agreement also includes exclusive licensing rights to Octapharma. These rights are linked to minimum yearly purchase orders for the prion-capture resin incorporated into Octapharma’s manufacturing process for its solvent/detergent-treated plasma product for transfusion, octaplasLG®. It has received regulatory approval in Germany and is reportedly in the final stages of regulatory assessment in other European countries including the U.K.
Of the C$4.5 million, Prometic received $0.9 million in May and another C$2.7 million in September. The rest will be paid upon completion of targeted milestones, expected to be met during the first half of 2010, according to the companies.
“This advance provided by Octapharma is significant for a number of reasons. Not only does it leverage our existing agreement, allowing ProMetic access to affordable financing, but more importantly, it provides tangible evidence of the strength of the partnership between ProMetic and Octapharma,” comments Bruce Pritchard, ProMetic’s CFO. “We are very excited to be contracted to provide our prion capture technology to Octapharma for use in their octaplasLG® product, particularly given that product’s increasing exposure in the marketplace.”