InSite Vision Incorporated has agreed to sell its royalty on future sales of Besivance, to SWK Funding LLC, a wholly-owned subsidiary of SWK Holdings Corporation and Bess Royalty, LP for up to $16 million. Besivance (besifloxacin ophthalmic suspension) 0.6 per cent is marketed globally by Bausch + Lomb for the treatment of bacterial conjunctivitis.
Under the terms of the agreement, SWK Funding will pay InSite Vision $15 million at closing with a further $1 million payable in February 2014 if Besivance net sales reach defined 2013 and second half 2013 revenue levels. When the buyers receive a 1X return of the total purchase price from the Besivance royalty, InSite Vision will receive 25 per cent of the Besivance royalty paid above $4.2 million annually. When the buyers receive 2.75X of the total purchase price, the full royalty is returned to InSite Vision. SWK Funding will begin receiving Besivance royalties as of January 2013. Patent protection for Besivance in the United States expires in mid-2021.
“We are pleased to be able to monetize the Besivance royalty stream to provide a non-dilutive source of cash for the company’s operations,” said Tim Ruane, InSite Vision CEO. “This cash will enable us to fund our upcoming second BromSite phase III clinical trial and stretch our cash runway well into 2014.”
InSite Vision recorded $1.2 million of Besivance royalty revenues in 2011 and $2.1 million for the year ended December 31, 2012.
“Our structured purchase of the Besivance royalty stream reflects our commitment to provide creative financing solutions to life science companies,” said Brett Pope, CEO of SWK Holdings Corporation. “We believe Besivance is an important ophthalmic antibiotic treatment option, and that Besivance has significant opportunities for future growth.”
SWK is a specialized finance company with a focus on the global healthcare sector.
InSite Vision is advancing new ophthalmologic products for unmet eye care needs based on its innovative DuraSite platform technologies.