DOR BioPharma Partners With Sigma-Tau Pharmaceuticals
As part of the agreement, Sigma-Tau will make a $6 million upfront investment in DOR, inclusive of $1.5 million that was recently completed under a letter of intent dated November 26, 2008. The remaining $4.5 million investment was priced at a 50% premium to the five day trailing average of DOR stock, putting the investment price at $0.18 per share.
Sigma-Tau will also make payments to DOR totaling $10 million, subject to the achievement of certain milestones. The first of these, a $1 million payment, will be made upon the enrollment of the first patient in DOR's upcoming confirmatory Phase 3 clinical trial of orBec for the treatment of acute gastrointestinal Graft-versus-Host disease, which is scheduled to occur in the first half of 2009.
In exchange for commercialization rights, Sigma-Tau will pay DOR a 35% royalty on net sales, under which DOR will supply the drug product while maintaining worldwide manufacturing rights. Commercialization expense, including launch activities, could potentially reach $15 million by the end of the first year after launch. Additionally, DOR will grant Sigma-Tau a seat on its board.
According to Ewing, New Jersey-based DOR, orBec represents a first-of-its-kind oral, locally acting therapy tailored to treat the gastrointestinal manifestation of GVHD, the organ system where GVHD is most frequently encountered and highly problematic.
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