"The agreement requires us to pay to MVP and Duke quarterly royalty payments within 60 days after the end of each quarter based on KRYSTEXXA net sales made in that quarter by us. The royalty rate for a particular quarter ranges between 8% and 12% of net sales based on the amount of cumulative net sales made by us. In addition, and pursuant to the agreement, we are required to make potential separate milestone payments to MVP and Duke if we successfully commercialize KRYSTEXXA and attain specified KRYSTEXXA sales targets. Also under the agreement, for sales made by sub-licensees and not by us, we are required to pay royalties of 20% on any revenues or other consideration we receive from sub-licensees during any quarter. We record the royalty and sales-based milestone payments pursuant to the MVP and Duke agreement as a component of cost of goods sold in our consolidated statements of operations.
The agreement with MVP and Duke remains in effect, on a country-by-country basis, for the longer of 10 years from the date of first sale of KRYSTEXXA in such country or the date of expiration of the last-to-expire patent covered by the agreement in such country. The licensors may terminate the agreement with respect to the countries affected upon our material breach, if not cured within a specified period of time, immediately after our third or subsequent material breach of the agreement or our fraud, willful misconduct or illegal conduct. The licensors may also terminate the agreement in the event of our bankruptcy or insolvency. Upon a termination of the agreement in one or more countries, all intellectual property rights, regulatory applications and pre-clinical and clinical data conveyed to us by MVP and Duke under the agreement with respect to the terminated countries, revert to MVP and Duke and we are permitted to sell off any remaining inventory of KRYSTEXXA for such countries."
In the event of bankruptcy the creditors will own Savient. That will include all clinical data and regulatory approvals NOT coveyed to Savient by Duke and MVP, as well as tax loss cary forward. The creditors will do with Savient as they please.
C757, thx for sharing this. Something I don't understand. I am thinking that there's a difference between "the creditors" and "Duke and MVP". In other words, there's "Duke and MVP" and then there's "the creditors" which to my way of thinking are the major institutional shareholders (the banks, brokerage houses, etc). Yet, it seems you are implying that they are one and the same. What gives? kg