In July 2007, the Company entered into a licensing and
distribution agreement with ProEthic Pharmaceuticals Inc.
("ProEthic") under which ProEthic was granted the exclusive right
to market, sell and distribute Lipofen in the United States. Under
the terms of the agreement, the Company receives an up-front
licensing fee of US $2 million, US $1 million of which was
received on signing. The balance will be received 180 days after
the first commercial sale of the product, which occurred on
September 11, 2007 and is included in accounts receivable at the
end of the third quarter. In addition, under the terms of the
agreement, the Company could receive additional milestone payments
of up to US $20 million based on the achievement of certain net
sales targets and will also receive a royalty based on a
percentage of net sales. These elements are reflected in net
revenue, which also incorporates direct product-related expenses
and amounts due to Galephar, the Company's technology partner.
After direct product-related expenses are deducted, including
payments to Galephar, the Company anticipates that it will retain
approximately 50% of total revenue under the agreement. In late
September 2007, ProEthic launched Lipofen in the U.S. market.
The Company's US $2 million investment in Galephar preferred
shares will be repaid by Galephar in US $350 quarterly payments,
beginning in the fourth quarter of 2007. These payments will be
included in net revenue based on the remaining amortization period
of the related intangible asset.
On April 27, 2007, the Company received a second approva
|SOURCE Cipher Pharmaceuticals Inc.|
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