Replies to post #359201 on Innovation Pharmaceuticals Inc (IPIX)

[olden_grumpini]

Here's the Alfasigma milestone bit you asked about:

(i) Development Milestones

For the UP/UPS Indication:
(1) US$ 1 million, upon Commencement of the First Phase III Clinical Trial; and
(2) US$ 1 million, upon the first filing of the Marketing Approval application to the US Regulatory Authority (“FDA”) or the EU Regulatory Authority (“EMA”), as applicable, without any duplication;


(ii) Regulatory Milestones

For the UP/UPS Indication:
(1) US$ 3 million, upon obtainment of the Marketing Approval from FDA; and
(2) US$ 1 million, upon obtainment of the Marketing Approval from EMA.

(iii) Sales Milestones
Milestone upon achievement of the following aggregate Net Sales

Payment
First achievement of US$ 100 million, US$ 3 million
First achievement of US$ 200 million, US$ 6 million
First achievement of US$ 300 million, US$ 9 million

ALFASIGMA shall notify IPI in writing of the occurrence of any applicable Milestone Event (each, a “Sales Milestone Notice”) within ten (10) Business Days after such occurrence.

(c) Royalties. During the Royalty Term, ALFASIGMA will pay IPI a royalty equal to 6% of the Net Sales, on a product-by-product, country-by-country basis, while and to the extent that the Compound or the Product is Covered by any IPI Patent (the “Royalty”, and together with the Initial Payment and the Milestone Payment, collectively, the “Consideration”), provided, however, that the Royalty shall be automatically, without action of any Party, reduced to 2% of the Net Sales if the Compound and/or the Product are not Covered by any IPI Patent or are otherwise Covered by a Joint Patent under Section 8.1(c).

(d) Royalty Reduction. Upon request of ALFASIGMA, the Parties acting in good faith shall negotiate a reduction of the Royalty rate set forth in Section 6.1(c), on a country-by-country and Product-by-Product basis, under general equitable standards, if following the entry into the market of any country of the ALFASIGMA Territory of a generic version of the Product by a Third Party (as determined by a reliable data source that is reasonably satisfactory to the Parties), the Product is no longer competitive in such market due to the then applicable Royalty rate. When negotiating a reduction to the applicable Royalty rate in accordance with this Section 6.1(d), the Parties shall use Commercially Reasonable Efforts to proportionately share equally the economic loss associated with any reduction in revenue, profitability, margins or similar financial metric, resulting from the entry of the generic version of the Product in the applicable country. For clarity, the term “generic version” is intended to refer to the entry of a true-generic version of the Product by a Third Party, and not merely a product competitive to the Product.

You can find the Alfasigma deal here: 8-K from July 18, 2019

[farrell90]

My intuition tells me Alpha Sigma want to get their trail under way because the Brilacidin oral medication trial for ulcerative colitis is projected to start soon. They could be concerned the oral formulation will work so well the rectal preparation will be superfluous.

Glta,Farrell