The Agreement finalizes a previously executed Memorandum of Understanding dated April 4, 2006 with respect to both companies collaboration in developing and distributing monoclonal antibody drugs.
The term of the Agreement is ten years following the first commercial sale of products.
Recently, Serum has entered into a Definitive Agreement with a third party that gives Serum the right to appoint a distributor for the marketing and distribution of Rabies monoclonal antibody products.
Serum has agreed to appoint Akorn as the exclusive distributor for Rabies monoclonal antibody.
In exchange for Akorn receiving exclusive marketing and distribution rights to North, Central, and South America, Akorn has agreed to help fund product development through milestone payments.
These milestone payments include the completion of Phase I, Phase II, and Phase III clinical trials leading to eventual receipt of CBER approval for a BLA license.
BLA approval is targeted to occur in 2012 and Akorn expects to fund these milestone payments with cash flow provided from operations.
As the exclusive marketing and distribution partner for Rabies monoclonal antibody, Akorn will receive 40% of the revenues from product sales in North America and 50% of the revenues from product sales in Central and South America.
As part of the Agreement, Serum also grants Akorn the first option right to obtain exclusive marketing rights in North, Central, and South America for a second monoclonal antibody product, Anti-D human monoclonal antibody.
The terms for Anti-D would be consistent with the terms and conditions for the Rabies monoclonal antibody product.
Additionally, Serum has granted Akorn the first option right to expand the Territory to include Europe in exchange for annual product sales requirements in Europe.
The current market size in North, Central, and South America and Europe for Rabies monoclonal antibody is approximately $100 million.
The current market size in North, Central, South America and Europe for Anti-D monoclonal antibody is approximately $500 million.
Arthur S. Przybyl, President and Chief Executive Officer of Akorn stated, "We are very excited to enter into this Agreement with Serum."
"This Agreement represents Akorn’s first biologic development and distribution product opportunity."
"In the future, we expect to continue to build our platform for development and eventual commercialization of additional biologic and vaccine products with Serum Institute."
"Also, after my recent visit to India, I have observed that Serum continues to make excellent progress on a new manufacturing plant dedicated to our anti-cancer injectable and lyophilized drug products. We expect our ANDA’s filings to commence in 2007."
Dr. Cyrus S. Poonawalla, Chairman and Managing Director of Serum Institute of India Ltd., stated, "We look forward to this product development and distribution Agreement for this biologic product as a continuing step towards strengthening the long-term relationship with Akorn."