Norwegian specialty pharmaceutical company Photocure (OSE: PHO) said Wednesday it has signed a global agreement with Salix Pharmaceuticals (NASDAQ:SLXP) for the development and commercialization of Lumacan, a diagnostic test for colon cancer. Colon cancer is traditionally diagnosed through colonoscopies with white light, which is increasingly known for its limitations in detecting cancer.
Lumacan is being developed to increase the detection rate for precancerous polyps and colon cancer through fluorescence diagnosis. In the US, it is estimated that approximately 14 million colonoscopies are done annually for diagnosis of colon cancer.
According to Photocure, earlier studies have shown a near 40% increased detection rate when Lumacan-colonoscopy diagnostic was used and the test is currently in Phase I/II trials.
Under the terms of the agreement, Salix will obtain an exclusive worldwide license to Lumacan, excluding the Nordic region, where Photocure has retained its rights.
In exchange for this, Photocure will receive a signing fee of US$4 million and is entitled to receive additional milestone payments totalling up to US$126.5 million, if certain conditions are satisfied.
In addition to the milestones, Salix will pay Photocure tiered double digit royalties on net sales and pay a percentage of all Salix sublicense revenue worldwide, outside of the US.
As a result of the deal, Salix will control and cover development, registration and commercialization costs for Lumacan globally, with Photocure covering certain costs of formulation development up to US$3 million, it said.
Aside for the indication of colorectal cancer, Salix will as well have the right to explore and develop products for additional indications involving the diagnosis of gastrointestinal dysplasia and cancer. Payments for products in respect to these indications will be negotiated in the future, said the companies.
"We believe Lumacan is truly an innovative and groundbreaking diagnostic which should complement our portfolio of gastrointestinal offerings. Lumacan's efficacy results thus far have been promising and show great potential if approved for marketing by the FDA," said CEO of Salix Carolyn Logan.
Salix said that Lumacan will target high risk screening patients and diagnostic patients in follow-up of colon cancer.
Via : proactiveinvestors
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