Faron has decided to initiate selective commercial collaborations with its drug candidates in limited territories, but to maintain full marketing and sales rights in the Company’s main markets (Europe, USA). Main market licensing deals will be considered following the completion and results of the Phase III trial evaluating Traumakine® in the treatment ARDS. The Company believes this strategy will serve the best interest of shareholders and allows flexible approach in the future.
The specialty pharma company Maruishi Pharmaceutical Co., Ltd. based in Osaka, Japan has been licensed Traumakine® in return for up to €5 million in development payments. The Traumakine® Phase II clinical trial was completed in Japan with positive top-line results, and Maruishi has now begun the pivotal Phase III clinical trial.
Maruishi will cover all the development costs in Japan in respect of Traumakine®. Faron is to receive a share of Maruishi´s net profits of Traumakine® through milestones, royalties and other payments. To date, Faron has received €2.3 million in milestone payments pursuant to its agreement with Maruishi and is due to receive up to an additional €2.7 million subject to certain key development milestones being met.
The China Medical System Holdings Ltd. (CMS) collaboration in Greater China is based on strategic agreements, according to which the Group (CMS and closely related development company A&B) has assets with Traumakine® rights in Mainland China, Hong Kong, Macao and Taiwan. The CMS Group also covers all territorial development costs. Faron is entitled to a profit per treatment and low double digit royalties above a certain minimum treatment price. A&B is a shareholder of Faron.
Pharmbio Korea, based in Seoul, has been licensed Traumakine® to develop and commercialise the treatment of ARDS in Korea. Faron has received an initial signing fee of €750,000 and is entitled to receive additional, development based milestones. In addition, Faron will receive third of Traumakine® profits, representing a double digit royalty on net sales, depending on end user pricing, and has agreed to cover development costs for Traumakine® in Korea. Additionally, Faron will provide European approval material for Pharmbio to obtain market authorisation in Korea and will also supply Traumakine drug product to Pharmbio at an agreed transfer price.