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Post# of 19309
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DewDiligence

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DewDiligence

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Re: pharm post# 12134

Wednesday, 06/25/2008 5:04:13 AM

Wednesday, June 25, 2008 5:04:13 AM

Post# of 19309
When will Ovation pay milestones?

The triggers for the milestone payments from Ovation (but not the amounts of such payments other than the known $9M relating to the HD indication) will be shown in an SEC Form-8K filing containing the redacted contract between Ovation and GTC. This Form 8K should be filed very soon (perhaps as soon as today).

My guess is that the contract will specify milestones for the following events:

a) Initiation of a phase-3 trial in the CABG indication.

b) Success in the phase-3 CABG trial (defined as hitting the primary endpoint).

c) Submission of an sBLA for the CABG indication.

d) FDA approval of ATryn for marketing in the CABG indication.

e) Repeat of steps a), b), c), d) for the DIC indication with smaller milestone payments if DIC is the second acquired-deficiency indication. (If the CABG indication does not get off the ground for some reason, then DIC could become the primary acquired-deficiency indication and trigger the same milestone payments that would have been triggered by the CABG indication.)

f) A sales-based milestone when annual sales in any calendar year exceed a specified threshold for the first time.

g) A subsequent sales-based milestone when annual sales in any calendar year exceed a higher specified threshold for the first time.

Of course, the actual triggers specified in the Ovation-GTC contract may be different than the ones shown above. However, these kinds of triggers would IMO be typical for the kind of contract Ovation and GTC have inked and hence I expect that the actual triggers will resemble the above to some degree.



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