PDL BioPharma said today it has acquired, for $65 million, portions of royalties and commercial milestone payments tied to expected sales of AcelRx Pharmaceuticals’ Zalviso™ (sufentanil sublingual tablet system) by its commercial partner Grunenthal in the E.U., Switzerland and Australia.
PDL said the deal will give it 75% of the royalties AcelRx receives from Grunenthal, as well as 80% of the first four commercial milestones subject to a capped amount.
Under the terms of the royalty agreement, royalty payments will be made to PDL until it receives payments equal to three times the initial investment or the expiration of the licensed patents, whichever comes first, according to a Form 8-K filed by PDL with the U.S. Securities and Exchange Commission.
AcelRx said in a separate statement that it will receive 25% of the royalties, 20% of the first four commercial milestones, 100% of the remaining commercial milestones and all development milestones—including a potential $15 million payment for the approval of Zalviso’s marketing authorization application by the European Commission.
Proceeds from the transaction, AcelRx said, will provide it with additional operating capital, which will be used for general corporate purposes, including regulatory activities associated with Zalviso and another product in development, ARX-04.
ARX-04 is a non-invasive, fast-onset sufentanil product candidate being studied for the potential treatment of patients with moderate-to-severe acute pain, both in military and civilian settings of trauma or injury. In August, AcelRx said the SAP301 Phase III study of ARX-04 (sufentanil sublingual tablet, 30 mcg), was fully enrolled, with top-line data from the study anticipated early in the fourth quarter of this year.
AcelRx CFO Timothy E. Morris stated that the deal with PDL “will increase our estimated cash at year end to over $100 million and should provide sufficient capital to complete regulatory submissions for ARX-04 in the U.S. and Europe, and to conduct limited additional work on Zalviso, if needed, in preparation for re-submitting a New Drug Application to the (FDA).”
Zalviso is a combination drug-device product designed to deliver a sublingual formulation of the opioid sufentanil through a patient controlled dispenser. Zalviso is being evaluated for the treatment of moderate to severe post-operative pain in the hospital setting and could be used in lieu of intravenous patient-controlled analgesia (IV PCA).
Zalviso is the lead product of AcelRx, which specializes in developing drugs for acute and breakthrough pain. Zalviso has been submitted for product approval in the E.U. and has received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA).
Pending approval, PDL said, Grunenthal expects to launch Zalviso beginning in the first half of 2016. PDL expects to begin receiving royalties shortly thereafter.
“This transaction represents the fifteenth transaction we have completed since launching our initiative to build a portfolio of income generating assets,” PDL President and CEO John P. McLaughlin said in a statement.
PDL manages a portfolio of patents and royalty assets, consisting primarily of its Queen et al. antibody humanization patents, as well as license agreements with various biotechnology and pharmaceutical companies.
PDL said it has invested approximately $895 million to date toward providing non-dilutive growth capital and financing solutions to late stage public and private healthcare companies, and offering immediate financial monetization of royalty streams to companies, academic institutions, and inventors.