GTC Biotherapeutics (fka GTCB)

[DewDiligence]

How the LFB collaberation works:

>I find the discussion of the sharing arrangement with LFB to be a bit vague in the proxy and hope you can help.<

The actual collaboration agreement between GTC and LFB can be read at:
http://www.sec.gov/Archives/edgar/data/904973/000114036106015470/ex10_3.htm

As is standard in these kinds of agreements, many of the juicy details are redacted. Still, by reading the redacted agreement, one can understand the basic framework of the collaboration.

>[The proxy] talks about developing jointly to share profits then talks about exclusive rights in Europe for LFB.<

The overall structure of the collaboration is a 50/50 sharing of development costs and eventual profits from any products including, but not limited to, FVIIa.

However, in Europe and in North America, one company has been designated the lead party for decisions relating to commercialization in that jurisdiction. This is a common way to run joint ventures for drug development, as it streamlines the decision-making process and allows each party to focus to a greater degree than if both parties shared decision-making on all matters in all jurisdictions.

>What benefit from Europe sales of rhFVIIa does GTCB expect? What is GTCB expected to spend to develop rhFVIIa in Europe as part of this agreement, perhaps the production system contribution will not be very expensive?<

As noted above, the costs and profits from the entire collaboration are split 50/50. LFB will book sales in Europe and GTC will book sales in North America but, on the bottom line, the split will be 50/50. The 50/50 split will be effectuated by having an annual transfer payment between the parties to true up the historical participation in costs and profits (as described in Section 8.3(c) of the collaboration agreement).

>What help can we expect from LFB when GTCB goes for US FDA approval...sharing of clinical/regulatory info from Europe?<

Yes—data sharing is covered in Section 5.5. of the collaboration agreement:

“Right of Reference to Data… Each Party agrees to provide the other Party, in a timely manner, with access to all clinical, safety and other data arising from its respective Development Activities. The other Party shall have the right to cross-reference all such data and information in any Regulatory Filing for any Product under this Agreement.”

Dew