DRC Acquires Royalties from Nanogen for $20 Million
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Drug Royalty Corporation Inc. (DRC) and Nanogen Inc. have announced that they have entered into an agreement for a trust managed by DRC to acquire an interest in royalties on the MGB™ (minor groove binder) technology owned by Nanogen for 5' nuclease real-time PCR applications in the biomedical research market.
Under terms of the agreement, between July 2006 and December 2011, DRC will be entitled to receive royalties up to a specified threshold, above which the parties will share royalties.
DRC will make a one time payment of $20 million to Nanogen. Nanogen retains ownership of the MGB™ patents, as well as future royalties beyond 2011.
"This transaction marks DRC's first acquisition of a royalty related to molecular biology research tools," said Paul Kirkconnell, Managing Director at Drug Royalty.
"This agreement represents an expansion beyond DRC's traditional interest in therapeutics and is another example of the tailored and innovative sources of capital DRC offers."
"Monetizing a portion of our royalty stream provides us with a non-dilutive means of raising capital to fund development of new products for the growing molecular diagnostic and personalized medicine market," said Howard C. Birndorf, Nanogen chairman and chief executive officer.
The royalty payments are related to Nanogen's patented MGB™ technology that has been licensed to Applied Biosystems for use in ABI's TaqMan® products (TaqMan® is a registered trademark of Roche Molecular Systems, Inc.).
Nanogen's MGB™ moiety provides many advantages in the design of oligonucleotides, such as allowing for the design of shorter probes with high sensitivity to mismatches, improving single nucleotide polymorphism detection, and allowing for multiplexing assays.
