Intec Pharma Ltd. (TASE: INTP), which develops pills for delayed release of drugs entering the intestine (an "accordion pill"), has announced the signing of an agreement with a major pharmaceutical company. The Intec Pharma share, which did not respond to the announcement, is currently traded at a NIS 193 million market cap.
As part of the agreement, Intel will immediately receive $1 million for initial R&D, and an option agreement will also be signed granting the global company rights to continue development and marketing of the drug.
If the international company exercises this option, it will pay Intec Pharma $8 million immediately, $39 million according to milestones until the product is approved for marketing in the US and Europe and sales begin, and another $100 million in payments for milestones linked to the achievement of sales targets.
In a step unusual for the industry, Intec Pharma also listed the royalties it is likely to receive under the agreement if and when the product reaches the market: a single-digit percentage of sales up to a maximum of $25 million a year, and a basket of royalties that includes at most $100 million. The name of the international company and the sub-sector of the drug were not reported, but it apparently treats mental and neurological diseases.
According to the announcement, the global company is among the world's 20 leading pharmaceutical companies.
Managed by CEO Zeev Weiss, Intec Pharma has a number of products that it is developing independently, containing generic drugs combined with its unique dispensing method, without any partnership with a major drug company, and a number of previous agreements for joint development of a drugs with large companies.
These past agreements have not yet produced significant revenue for the company, except for one agreement that generated NIS 6-7 million, before being canceled by the partner for strategic reasons. Intec Pharma also has two independent products in its pipeline. The leading product, designed for treatment of Parkinson's Disease, was approved in principle for Phase III trials by the US Food and Drug Administration (FDA) (a multi-center effectiveness trial) in October 2014. The company has been negotiating with the FDA since then to formulate a trial protocol.
The second significant product, designed for treatment of sleep disorders, has also passed Phase II trials, but the company will move forward with it only if it first finds a partner for it. At the end of 2014, the company had NIS 30 million in cash, after losing NIS 20.3 million in 2014.
Published by Globes [online], Israel business news - www.globes-online.com - on April 15, 2015
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