Payments to MethylGene include $3.875M in the first 18 months, further research and milestone fees, and an equity investment of up to $3 million.
MethylGene and Otsuka Pharmaceutical are collaborating on development of kinase inhibitors for ocular diseases excluding cancer. MethylGene will make $3.875 in the first 18 months of the partnership and stands to earn more in research funding, milestone fees, and eventual royalties. Otsuka is also committed to make an investment of between $1.5 million and $3 million in MethylGene’s stock.
Under the worldwide research collaboration and license agreement, the firms will develop small molecules for local delivery and treatment. MethylGene will cover the design, synthesis, characterization, and initial screening of kinase inhibitors. Otsuka will be responsible for and fund efficacy and toxicology studies as well as preclinical and clinical development. It will also handle the global commercialization of any resulting product.
Financial considerations dictate that in the next 18 months, Otsuka is committed to make an equity investment of $3 million in the event that MethylGene completes a concurrent financing of at least $10 million and is listed on a U.S. stock exchange. Otsuka could alternatively make a $1.5 million equity investment at a 20% premium if MethylGene is solely listed on the Toronto Stock Exchange.
The subject of the collaboration includes compounds that were initially evaluated under a material transfer agreement with Otsuka. The chemical basis for these compounds was identified as part of MethylGene’s effort to develop multitargeted kinase inhibitors for oncology. The compounds that are included in the collaboration with Otsuka are expected to be distinct and separate from MethylGene’s kinase compounds for oncology.
