All it means - AFFY sold toTakeda for $180Millions(Royalty based)- Takeda now takecare of Investigation,Regulatory(FDA),Management etc..
The Amendment effectuates a transfer of regulatory responsibilities, including the OMONTYS New Drug Application, or NDA, and all manufacturing, and development responsibilities from the Company to Takeda as soon as practicable but in any event prior to April 30, 2013 with related transition services and support. Takeda has agreed to reimburse the Company for certain personnel costs to assist in the transition and investigation activities for the month of April in order to support the planned transition. Takeda receives a worldwide, exclusive royalty-bearing license under Affymax and joint Takeda-Affymax patents to develop, manufacture and commercialize OMONTYS.
As a result of the Amendment, Takeda assumes full responsibility for OMONTYS, including the ongoing recall and investigation of OMONTYS as well as any subsequent decisions as to whether the product may be subject to re-introduction if Takeda is able to complete the investigation and address the safety concerns to the satisfaction of the FDA. If Takeda decides to re-introduce OMONTYS, all of which is highly uncertain, the Company is eligible to receive royalties and
(i) potential commercial milestone payments totaling up to $180 million of which $10 million is payable upon the first commercial sale after re-introduction of OMONTYS in the U.S., of which a $10 million and another $10 million relates to U.S. sales-based milestones, and of which $150 million relates to sales-based milestones in amounts as previously disclosed outside of the U.S. but now including Japan as a result of the Amendment and (ii) a potential development milestone payment of $5 million payable either upon regulatory approval in the E.U. or Japan. The royalties are tiered in the range of 13-17% with respect to net sales in the U.S. and in the range of 13-24% depending on the level of net sales by Takeda worldwide ex- U.S.
What do you thin will happen if the drug does not come back in a short amount of time and there are no royalties to be made. I think AFFY is in a position to make it big if the drug comes back and bail without repercussions if it does not. What about shareholder consideration?
Looks like they're going back to square 1, which is a straight licensing deal. Royalties are within range, while the milestones are a little small. It's as if we're negotiating a deal prior to FDA approval for exclusive rights to big Pharma. What I found most interesting in this 8K (aside from the time of the release, which Edgar screwed up) was the marketing opportunity in Japan. Up to now, Takeda had held back on applying for commercial sale of Omontys in Japan, partly because Amgen had everything tied up with the renal care distributors. Today, it appears that Japan is the major part of the licensing deal. I either case, this works for Takeda in that they get full control of the drug without having to pay more than minimal amounts prior to potential reintroduction of the drug. Takeda, having deep pockets, will and would be sued in any event, so taking full responsibility for the recall and investigation has no bearing for them. Affymax, on the other hand, is relieved of the responsibility of investigating the root cause of the Omontys hypersensitivity reactions. They can operate in damage control mode without bleeding any more cash. The class action lawyers will try to go after the remaining cash, but this will be held up for a long time. If they can preserve some cash and keep a clean shell without having successor liability tied to the corporation, then they can reverse merge with another company. I think it's worth a buy under a dollar. No one benefits from a bankruptcy at this point, not even the creditors or bounty hunting lawyers.