Denmark’s Egalet has entered into a collaboration and license agreement with Shionogi.
The collaboration and agreement regards the development and potential commercialization of multiple oral abuse-deterrent hydrocodone opioid product candidates using Egalet’s proprietary technology. Egalet will receive a $10 million upfront payment from Shionogi. Furthermore, Shionogi has agreed to purchase up to approximately $15 million in common stock in a private placement to close concurrently with Egalet’s recently filed initial public offering. Also, Egalet is eligible to receive milestone payments upon development and approval of products under the agreement, which may exceed $300 million if multiple products are approved.
According to a press release, Shionogi will fund all costs associated with the development of these products. Shionogi will also have exclusive global rights to commercialize the resulting products. If any products developed under the collaboration are approved for marketing, Egalet is 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 $100 million based on the attainment of specified sales thresholds.