US-based pharmaceutical firm Egalet has entered into a definitive collaboration and license agreement with Japan-based Shionogi for the development and commercialization of multiple oral abuse-deterrent hydrocodone opioid product candidates using Egalet's proprietary technology.
Under the deal, Egalet will receive a $10m upfront payment from Shionogi, which has agreed to purchase about $15m in common stock in a private placement to close concurrently with Egalet's recently filed initial public offering.
In addition, Egalet is eligible to receive milestone payments upon development and approval of products, which may exceed $300m if multiple products are approved.
The deal will see Shionogi fund all costs associated with the development of these products and it will also have exclusive global rights to commercialize the resulting products.
In case any products developed under the deal are approved for marketing, Egalet will be eligible to receive tiered royalties, ranging from the mid-single digits to the low double digits based on the net sales of such products, as well as sales-based milestone payments that could exceed $100m based on the attainment of specified sales thresholds.
Egalet president and CEO Bob Radie said the company is happy to be collaborating with Shionogi for the development and potential commercialization of abuse-deterrent hydrocodone products using its proprietary technology.
"We believe this collaboration provides validation for our proprietary abuse-deterrent drug delivery platform and positions us to capitalize on our technology, both through the products to be developed under the collaboration and by enabling us to develop additional opioid candidates utilizing our platform technology," Radie said.
In the transaction, US-based full-service brokerage and investment banking firm Stifel served as exclusive financial advisor to Egalet.