MB provides update on LungExpress Dx activities
Med BioGene (MB) has provided an update regarding the commercialisation of LungExpress Dx, its commercialisation agreement with Precision Therapeutics, and ongoing litigation with Signal Genetics and Respira Health (Signal Genetics). LungExpress Dx is a proprietary gene expression-based test to improve upon staging for identifying those patients with early-stage non-small-cell lung cancer (NSCLC) who, following surgical removal of their tumour, are at higher and lower risks of mortality.
Commercialisation of LungExpress Dx
Precision expects to commence commercialisation of LungExpress Dx in its CLIA-certified laboratory by mid-2013. In advance of this, the company has established an advisory board comprised of world leaders in LC research and treatment from the US, Canada, France and Italy.
Amendment of commercialisation agreement
In April 2011, MB closed its commercialisation, licence and research reimbursement agreement, providing Precision with exclusive global rights to develop and commercialise LungExpress Dx. Under the terms of the agreement, Precision has paid to MB licence fees and research reimbursement of US$2.3 million, half of which is credited against future royalties that may be owed to MB by Precision. In addition, MB is eligible to receive up to US$1.0 million in payments based on the achievement of certain milestones, all of which are credited against future royalties that may be owed to MB by Precision. MB and Precision have amended, among other things, these milestone payments such that Precision will now pay to MB, following the commercial launch of LungExpress Dx, amounts totalling U$500,000 and, following the achievement of US$5 million in net revenues from LungExpress Dx, amounts totalling US$500,000.
MB will also receive royalty payments in the high single digits based on a percentage of Precision's future net revenues associated with the commercialisation of LungExpress Dx.
By restructuring the milestone payments in the commercialisation agreement, MB expects to extend its cash runway following the commercialisation of LungExpress Dx. As a result of its focused burn rate, MB believes that it currently has sufficient cash resources to continue with operations until approximately the first quarter of 2014. If Precision commercialises LungExpress Dx around the expected timeframe then, with receipt of the US$500,000 in milestone payments, MB believes that it will have sufficient cash resources to fund operations until approximately the third quarter of 2015.
Litigation with Signal
In February 2011, Signal and Respira filed a lawsuit against MB and Precision in the Supreme Court of the State of New York asserting 12 causes of action against MB. MB continues to believe that the lawsuit is frivolous, vexatious and entirely without merit, and is defending the lawsuit vigorously. MB has received financial support from Precision to, among other things, conduct such defence (half of which is credited against future royalties that may be owed to MB by Precision) and cover any settlement or award of damages made against MB, subject in all cases to certain threshold limits.
Discovery in the lawsuit has been completed and, on 24th August, MB filed a motion for partial summary judgement to dismiss the claims of Signal and Respira for lost profits, and causes of action for negligent misrepresentation, unfair competition and unjust enrichment. The hearing to rule on that motion has not yet been scheduled.
|Agreement Status:||Updated||Date Announced:||3 Oct 2012|
|Date Last Reported:||1 Mar 2011||Duration:|
|Est Total Value:||Investment To Date:|
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|Therapeutic Area:||Diagnostic Agents|
|Indication:||Cancer (non-small cell lung)|