TORONTO--(BUSINESS WIRE)--Acerus Pharmaceuticals Corporation (TSX:ASP) (“Acerus” or the “Company”) today reported that it has entered into an agreement with Mattern Pharma AG (“Mattern”) to buy out all of its obligations (the “Buyout”) under the Amended and Restated Intellectual Property Rights and Product Development Agreement, dated December 21, 2013 (as amended) (“License Agreement”), including all of its future royalty payment obligations.
Under the License Agreement, Acerus owed royalties on upfronts, milestones and revenues from products, including NATESTO®, covered by the License Agreement, including minimum annual royalties of U.S.$5.0 million if gross product sales are U.S.$75 million or greater or U.S.$2.5 million if gross product sales are below U.S.$75 million, starting in fiscal 2018 and ending in 2024. Pursuant to the Buyout, with the payment of U.S.$7.5 million, all of Acerus’ material obligations owed to Mattern are suspended, but Mattern’s obligations to Acerus remain in force. Under the Buyout, among other rights, Acerus receives a perpetual, fully-paid, irrevocable license to all of Mattern’s patents and know-how for the products covered by the License Agreement. Acerus will pay the U.S.$7.5 million in the following instalments: U.S.$0.75M within 10 days from execution, U.S.$1.75M by September 20, 2018, U.S.$2.50M by January 20, 2019, and U.S.$2.50M by January 20, 2020.
“The Buyout will result in higher gross margins and bring greater clarity to reporting of the cost of goods for Natesto going forward,” said Ken Yoon, Chief Financial Officer of Acerus.
“The Buyout represents a mutually beneficial outcome for both parties,” said Ed Gudaitis, President and Chief Executive Officer of Acerus.
The Buyout also includes a covenant not to sue and a waiver from Mattern, which will become irrevocable upon payment of the last instalment to Mattern. The Buyout will remain in full force and effect as long as the License Agreement is in force. In the event of a payment default, following a grace period, the Buyout automatically terminates and the License Agreement’s obligations become binding on Acerus again. In such an eventuality, all monies paid by Acerus pursuant to the Buyout, with the exception of the first instalment, can be offset against monies that would otherwise be owed to Mattern under the License Agreement.
Acerus Pharmaceuticals Corporation is a Canadian-based specialty pharmaceutical company focused on the development, manufacture, marketing and distribution of innovative, branded products that improve patient experience, with a primary focus in the field of men’s and women’s health. The Company commercializes its products via its own salesforce in Canada, and through a global network of licensed distributors in the U.S. and other territories.
Acerus currently has three marketed products: ESTRACE®, a product for the symptomatic relief of menopausal symptoms, is commercialized in Canada; NATESTO®, the first and only testosterone nasal gel for testosterone replacement therapy in adult males diagnosed with hypogonadism, is commercialized in Canada and the U.S.; and URIVARX®, a Natural Health Product that helps reduce symptoms of hyperactive bladder such as daytime urinary frequency, urgency and nocturia. URIVARX® was recently approved by Health Canada and is being offered over-the-counter to Canadians dealing with such symptoms. Also, NATESTO® has been licensed for distribution in 48 additional countries worldwide. Marketing approvals in jurisdictions outside of North America are expected to take place over the course of the coming years. Acerus’ pipeline includes five innovative products: STENDRA®, a new chemical entity PDE5 inhibitor for the treatment of erectile dysfunction, which has been approved by the US FDA and the EU EMA and is commercialized in the US under the trade name STENDRA® and in the EU under the trade name SPEDRA®; ELEGANt™ Vaginal Moisturizer, which provides comfort to women suffering from vaginal dryness, and ELEGANT™ pH, which is a pH balanced vaginal product; GYNOFLOR™, an ultra-low dose vaginal estrogen combined with a probiotic, for which a NDS has been filed in Canada for the treatment of vaginal atrophy, restoration of vaginal flora and treatment of certain vaginal infections; and TEFINA™, a clinical stage product aimed at addressing a significant unmet need for women with female sexual dysfunction. Finally, Acerus is working on expanding its product portfolio by leveraging its proprietary delivery systems, patents and formulation expertise. As such, Acerus has a number of products in various stage of development. One of these projects relates to cannabinoids (whether synthetic or naturally derived cannabinoids) to be delivered intranasally to patients, which may have multiple possible therapeutic applications (the “Cannabinoids Initiative”). Acerus has filed patent applications on the Cannabinoids Initiative, is currently working on setting up a series of pharmacokinetic clinical trials and is actively looking at potential partnering transactions for these initiatives.
Notice Regarding Forward-Looking Statements
Information in this press release that is not current or historical factual information may constitute forward looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the company is subject to a number of risks and uncertainties and could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 20, 2018 which is available at www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities law.