BiolineRX Ltd. (TASE:BLRX) has granted an out-license to Cypress Bioscience Inc. (Nasdaq: CYBP) for the company's BL-1020 drug for the treatment of schizophrenia in the US, Canada, and Mexico.
Cypress has exclusive rights to complete clinical trials and regulatory procedures of BL-1020, and will bear the full costs in these clinical trials and regulatory procedures, as well as production and marketing of the drug in the territory. The company says that these costs will, by their nature, cost hundreds of millions dollars.
BiolineRX anticipates up to $365 million in payments from Cypress under the licensing agreement, not including royalties on sales. BiolineRX will receive $30 million upfront payment when the contract is closed; up to $250 million in milestone payments related to the development and approval of the drug, including use of the drug for other illnesses, and positive results of the clinical trials; and up to $85 million in milestone payment relating to the sale of the drug.
In addition to these payments, BiolineRX expects net royalties on sales of BL-1020 in Cypress's territory of 12-18% of annual sales.
BiolineRX will pay the BL-1020 license-holder part of the proceeds from the out-license.
Closing of the deal is subject to approval by the Office of the Chief Scientist, which has supported development of BL-1020.
BiolineRX's share price rose 12.8% in morning trading on the TASE to NIS 4.72, giving a market cap of NIS 580 million.
Published by Globes [online], Israel business news - www.globes-online.com - on June 20, 2010
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