Cangene Strikes new Deal with Apotex to Commercialize Certain Biotech Drugs
News Apr 17, 2009
Cangene Corporation reports that it has signed a new agreement with its majority shareholder, the Apotex Group. Since 1995, under an existing agreement, Apotex has funded research and development of several recombinant biopharmaceutical products at Cangene; these funding obligations have been satisfied.
Under the new agreement, Cangene obtains rights to commercialize these products, which include Leucotropin®, Cangene's version of a white-blood-cell-stimulating protein known as GM-CSF, and Accretropin™, Cangene's human growth hormone. Due to the extent of Apotex's investment in the two lead drugs, however, both companies have the right to take Leucotropin® or Accretropin™ to market and would pay the other company a small royalty based on any sales.
"Apotex has played a large role in the development of certain products over the years, but recently both of us have been increasingly focused on other areas so it made sense to revise our arrangement. We are now deciding how best to proceed, if at all, with certain recombinant products that we currently have in development or others that we are interested in pursuing," said Dr. John Langstaff, Cangene's president and CEO.
Also changed under the new agreement is the royalty revenue that Cangene currently receives from Apotex on its sales of a product called Ferriprox® (deferiprone). This will be phased out over three fiscal years-Cangene will continue to receive a royalty equivalent to 50% of deferiprone's sales through 2009, then 37.5% in 2010 and terminating with 18.75% in 2011.
With the current reduced level of activity related to the non-hyperimmune protein products at Cangene's biopharmaceutical manufacturing facility, the Company is scaling back operations related to its own products there. It will, however, continue evaluating contract-manufacturing opportunities at the facility. The change will result in some operational restructuring, including staff reductions.
Unaffected by this new agreement is Cangene's U.S.-distribution agreement with Apotex Corp. for Cangene's hyperimmune product, HepaGam B®; sales of this product have been growing steadily over the past year.