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Merck, InSite Vision amend payment terms of AzaSite license agreement

InSite Vision (INSV) announced that Merck (MRK), through its subsidiary Inspire Pharmaceuticals, has agreed to amend the payment terms of the existing AzaSite 1% license agreement. On a quarterly basis, Merck will pay InSite the higher of the pro-rata annual minimum royalty or the earned royalty for 2012 and 2013. In addition, in August 2012, Merck will pay InSite a catch-up payment for the difference between the earned royalty already paid for the fourth quarter of 2011 and the first and second quarters of 2012, and the pro-rata annual minimum royalties for those quarters. Under the terms of the AzaSite license agreement, the minimum royalties due to InSite in 2012 total $17M. InSite expects to receive minimum royalties of $4.25M for the fourth quarter of 2012. In addition, Merck will pay InSite a catch-up payment of about $7.2M before August 15, 2012.