In exchange for the IP license, Benitec will receive an upfront payment of $2 million and stands to receive royalties on product sales and sublicenses. The companies noted that Sigma-Aldrich also acquired a license in the research reagent field to patents co-owned by Benitec and the Commonwealth Scientific and Industrial Research Organization of Australia related to the use of RNAi for use in non-humans including plants, animals, and insects.
Benitec and Sigma-Aldrich said that the $2.5 million equity investment will be made in two tranches. Sigma-Aldrich has already purchased about 13.5 million shares of Benitec for $1.7 million, and will purchase an additional 6 million for $800,000 upon shareholder approval. Both tranches value Benitec shares at Aus$0.17 (US$0.11) each.
Once the second tranche closes, Sigma-Aldrich will be granted about 10 million options to purchase Benitec stock at Aus$0.32 per share, exercisable at any time before April 6, 2008.