Nastech and Pharmacia in Worldwide Agreement

06-Feb-2002

Nastech Pharmaceutical Company and Pharmacia Corporation have announced an agreement for the development and marketing of Nastech's proprietary nasally administered apomorphine product for the treatment of erectile dysfunction (ED) and female sexual dysfunction (FSD). Nastech's proprietary nasal formulation is designed to maximize the rapid onset, therapeutic effect and overall safety of apomorphine. Under terms of the agreement, Pharmacia receives exclusive, worldwide rights to develop and market nasally administered apomorphine for the treatment of male and female sexual dysfunction and will manage and fund all future development in these indications. Nastech retains certain development rights in other therapeutic areas. Nastech will receive an upfront payment at signing of $3.0 million and, upon satisfaction of certain future conditions, development and sales milestones totaling an additional $45.0 million. Certain additional costs incurred by Nastech of up to $3.4 million are reimbursable. Less than half of the milestone payments will be based on achievement of certain sales levels. Pharmacia will also purchase 250,000 shares of Nastech common stock for $5.0 million. Upon commercialization, Nastech will receive significant royalties on product sales that escalate based on sales levels. For the first five years following launch, Nastech will manufacture certain quantities of nasally administered apomorphine and will receive transfer payments from Pharmacia. Nastech also receives minimum royalties during a portion of the term of the agreement. "Pharmacia is the ideal partner for our nasally administered apomorphine product because of their outstanding drug development capabilities that require simultaneous worldwide coordination, exceptional marketing capabilities that require patient as well as physician education, and a strong competitive position in the rapidly expanding sexual dysfunction and urology markets worldwide," stated Steven Quay, Chairman, President and Chief Executive Officer of Nastech. "This agreement allows Nastech to further expand our growing R&D pipeline of major product opportunities and thus represents an important validation of our new business model. As a leading formulation science company, we will continue to focus on the rapid and cost-effective early clinical development of proprietary nasal formulations of drugs, including morphine, a triptan, alpha interferon, beta interferon and human growth hormone which are already in clinical trials, with the goal of licensing these opportunities to leading pharmaceutical companies for significant upfront, milestone, and royalty payments." "We are very pleased that Nastech has chosen Pharmacia for the development and marketing of nasally administered apomorphine," said Goran Ando, M.D., Executive Vice President and President, Research and Development, Pharmacia Corporation. "This drug candidate represents an innovative approach to the treatment of sexual dysfunction where we have an established research, development and commercial presence." The transaction is subject to a number of conditions to closing set forth in the agreement, including making necessary antitrust filings and expiration or early termination of the applicable waiting period under the Hart- Scott-Rodino Antitrust Improvements Act of 1976 as amended.

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