MDRNA this week said that Par Pharmaceuticals has agreed to purchase its manufacturing facilities in Hauppauge, NY, as well as its abbreviated new drug application for generic calcitonin-salmon nasal spray, for an undisclosed amount.
The agreement, which eliminates all of MDRNA's non-RNAi expenses, "represents the final step in our plan to create a company solely focused in the research and development of RNAi-based therapeutics," Michael French, president and CEO of MDRNA, said in a statement.
Under the terms of the deal, MDRNA said it will receive upfront cash of an undisclosed amount and "double-digit profit sharing" on commercial sales of calcitonin. Par will also assume MDRNA's supply and manufacturing obligations as well as all operating costs associated with the facilities.
The nasal spray is a legacy product from Nastech Pharmaceutical, which reorganized into MDRNA, a pure-play RNAi drug developer, last year (see RNAi News, 6/12/2008).
In December, the US Food and Drug Administration tentatively approved MDRNA's ANDA for calcitonin for the treatment of osteoporosis. MDRNA said at the time that it expected full FDA approval by this June (see RNAi News, 12/18/2008).
According to an 8-K that MDRNA filed with the Securities and Exchange Commission today, Par and MDRNA "mutually terminated" a license and supply agreement dating back to October 2004 under which MDRNA agreed to manufacture and supply finished calcitonin-salmon nasal spray product to Par, while Par agreed to distribute the product in the US.
Under the terms of the asset sale, Par assumed from MDRNA two lease agreements for separate manufacturing facilities in Hauppauge, NY, as well as a supply and manufacturing agreement for dated Sept. 23, 2005, between MDRNA and QOL Medical related to QOL's Nascobal nasal spray.
French said that the sale of the assets to Par "significantly reduces our non-RNAi related expenses, provides revenue from the commercial sales of calcitonin, and permits the seamless transition of the manufacturing obligations without disrupting our current customers' supply demands."
He added that the company will "continue to look for means of monetizing the legacy nasal assets."
The agreement follows MDRNA's disclosure last week that it will focus its drug-development efforts exclusively on liver cancer while trimming other projects from its pipeline in an effort to conserve resources (see RNAi News, 3/26/2009).
For the three months ended Dec. 31, MDRNA's revenues dropped to $200,000 from $6.4 million in the same period a year earlier. The company finished 2008 with about $3.4 million in cash and cash equivalents.
In a separate SEC filing today, MDRNA said that the asset sale will lead to a delay in submitting its annual report for the year ended Dec. 31, 2008.
"As a result of the close proximity between the closing of the asset sale and the prescribed due date of the annual report, the company was unable to file its annual report in a timely manner without unreasonable effort or expense," the SEC filing said.
MDRNA added that it plans to file the report "no later than fifteen days after its original prescribed due date.”
The company said that it expects 2008 revenues to decline to $2.6 million from approximately $18.1 million in 2007.