) was recently notified that Cosmo Technologies Limited, a
subsidiary of Cosmo Pharmaceuticals S.p.A., agreed to receive a
commercial milestone payment of $7.0 million in cash as per the
collaboration agreement between Santarus and Cosmo. The milestone
payment was related to the first commercial sale of Uceris in Feb
2013. Cosmo had the option to receive the payment either in cash
or through the issuance of shares.
We note that previous milestone payments have been received by
Cosmo through the issuance of shares. At the time of the
commencement of the deal, Santarus made an upfront payment of
$2.5 million in cash apart from issuing 6 million shares.
Santarus's collaboration agreement with Cosmo was signed in
Dec 2008. As per the agreement, Santarus was given exclusive
rights to develop and commercialize Uceris and rifamycin SV MMX
in the US.
Santarus may have to pay up to $22.5 million for Uceris and
$28 million for rifamycin SV MMX to Cosmo on the achievement of
commercial milestones. Santarus is also liable to pay tiered
loyalties of 12% (on annual net sales of each licensed product up
to $120 million) and 14% (on annual net sales of each licensed
product exceeding $120 million). Milestone payments will be made
in cash or through additional share issuance as decided by
Santarus also has a commercial supply agreement with Cosmo for
We note that in Jan 2013, Uceris received approval from the US
Food and Drug Administration (FDA) for the induction of remission
of active, mild to moderate ulcerative colitis. Uceris was
launched in Feb 2013.
Santarus is focused on the commercialization of Uceris and is
promoting the product to gastroenterologists, endocrinologists
and other selected physicians.
Recently, results published in the journal
from the CORE II study showed that the 9 mg dose of Uceris had a
statistically significant benefit over placebo in meeting the
primary endpoint. The primary endpoint was the induction of
combined clinical and endoscopic remission at week 8 in patients
with active, mild to moderate ulcerative colitis.
However, we remind investors that companies like
Salix Pharmaceuticals Ltd.
) have a presence in the ulcerative colitis market.
Currently, Santarus carries a Zacks Rank #3 (Hold). Companies
) look well-positioned with a Zacks Rank #1 (Strong Buy).
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