Deal covering fullerene molecules also calls for up to $4.25 million in milestones for each product.

Arrowhead Research’s subsidiary, Tego Biosciences, has sold its noncash intellectual property (IP) to Luna Innovations for $430,000 up front. The deal includes a portfolio of foreign and domestic patents and patent applications relating to modified fullerenes for use in diagnostic, therapeutic, imaging, and other biopharmaceutical-related applications.

“Tego IP came into Arrowhead via the Carbon Nanotechnologies acquisition, and we decided some time ago that it did not make sense for us to build the expertise necessary to develop fullerene-based healthcare products,” explains Arrowhead’s president and CEO Christopher Anzalone, Ph.D. “We also recognized that there was a lot of potential value locked up in the Tego patent portfolio, so we sought to unlock that value with the right partner.

“As a company and through some of its senior scientists, Luna brings a strong knowledge base of fullerene derivatives. We believe that their focused effort to develop fullerene-based products has the potential to bear fruit, particularly now that it has access to the Tego patent portfolio. We view this as a potentially significant value-driver for Arrowhead in the long term because the Tego patent portfolio is not just applicable to a single product. Rather, it may be used for a suite of multiple products, each of which could bring value to Arrowhead via milestone payments and royalties.”

Under the terms of the agreement, Luna will pay milestone fees of $4.25 million for each fullerene product it brings to market under the Tego IP. Additionally, Tego will earn royalties on net sales of all products built with its IP. Tego will receive 10% on revenues from the licensing or resale of the IP and 50% of net proceeds from The Bronx Project products developed using Tego IP.

Arrowhead Research is a holding company that forms, acquires, and operates subsidiaries commercializing nanotechnologies. Unidym and Agonn, two of its subsidiaries, develop carbon nanotubes for the electronics industry. Calando Pharmaceuticals, another subsidiary, couples nanotechnology and the potential of RNAis. Calando’s self-assembling nanoparticles, comprising a polymer delivery system and an RNAi therapeutic, are designed for intravenous injection and have shown positive results in small-scale animal studies.

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