Palatin Technologies, Inc announced an extension of its exclusive research collaboration and license agreement with AstraZeneca to discover, develop and commercialize compounds that target melanocortin receptors and the signing of a clinical trial sponsored research agreement.
Under the extension to the license agreement, Palatin will receive an upfront payment of $1.6 million and AstraZeneca has been granted licenses to additional compounds and patents. Additionally, the research collaboration term has been extended, with Palatin contributing scientific expertise and AstraZeneca supporting Palatin's internal activities at an agreed full-time equivalent rate.
Under the clinical trial sponsored research agreement, Palatin will be responsible for conducting a study of the effects of melanocortin receptor specific compounds on food intake, obesity and other metabolic parameters.
Palatin will be eligible, in the near future, for milestone payments totalling $5 million in connection with the collaboration and license agreement.
"The license extension and clinical trial agreements point to the progress Palatin and AstraZeneca have made with their collaborative melanocortin receptor obesity programme," stated Stephen T Wills, Palatin's EVP of Operations and CFO. "Of the total $6.6 million due from AstraZeneca, we anticipate receiving $4.1 million by December 31, 2008 and the remaining $2.5 million in the first quarter of calendar year 2009. This $6.6 million, coupled with $1.7 million that Palatin received this month from the sale of net operating losses to the State of New Jersey, $700,000 from the sale of non-core fixed assets, and a cash and cash equivalents balance of $8.1 million at September 30, 2008, gives Palatin sufficient cash to fund its projected operations through calendar year 2009."
Under terms of the original collaboration and license agreement signed in January 2007, Palatin received an upfront payment of $10 million from AstraZeneca and is eligible for milestone payments totalling $300 million, with up to $180 million contingent upon development and regulatory milestones and the balance on achievement of sales targets, together with the payment of stepped royalties on product sales to double digit rates, dependent on sales achieved. AstraZeneca is responsible for product commercialization, product discovery and development costs.
Palatin Technologies is a biopharmaceutical company focused on discovering and developing targeted, receptor-specific small molecule and peptide therapeutics.