Changes affect the $295 million in milestones that Palatin was entitled to under the original deal.
Palatin Technologies and AstraZeneca have amended the structure of milestone and royalty fees under the partnership targeting melanocortin receptors for obesity and related indications. Palatin will receive $5 million as part of the changes.
The agreement to discover, develop, and commercialize compounds that target melanocortin receptors was inked in January 2007. Palatin obtained $10 million up front, and AstraZeneca agreed to pay $180 million in development and regulatory milestones and $120 million in fees tied to the achievement of sales targets. Stepped royalties on product sales up to double-digit rates depending on sales figures were also part of the deal.
It is unclear what changes have been made to the terms of these milestones and royalty rates. No one was immediately available for comment. The $5 million will come in two parts: AstraZeneca will pay $2.5 million upon signing and, subject to completion of certain tasks relating to the program, another $2.5 million in the first quarter of calendar year 2010.
Palatin reported earning $2.5 million as a milestone from AstraZeneca in February. The company says that it has finished a clinical study with a melanocortin receptor compound and has also agreed to conduct additional clinical studies under a clinical trial sponsored research agreement to be funded by AstraZeneca. AstraZeneca retains responsibility for product commercialization, product discovery, and development costs.
As of March 31, Palatin had cash, cash equivalents, and available-for-sale investments totaling $11 million.