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XenoPort entitled to $20M upfront payment on license pact

In a regulatory filing, XenoPort disclosed that as previously reported, on May 14, XenoPort (XNPT) entered into an exclusive license agreement with Reckitt Benckiser Pharmaceuticals. Pursuant to the terms of the License Agreement, upon clearance under the Hart-Scott-Rodino Antitrust Improvements Act, as amended, which clearance was obtained on June 19, the company granted to Reckitt exclusive, world-wide rights to develop and commercialize pharmaceutical products containing arbaclofen placarbil and other prodrugs of baclofen or R-baclofen for all indications, subject to the company’s right of first negotiation with Reckitt to collaborate to develop and commercialize Products for non-addiction indications. In exchange for these rights under the License Agreement, the company is entitled to receive an upfront, non-refundable cash payment of $20M and is entitled to receive an additional $5M after delivery of certain technology and materials. The company is also eligible to receive aggregate cash payments of up to $120M upon the achievement of certain predefined milestones, of which $70M are regulatory and development-based milestones and $50Mn are commercialization-based milestones. In addition, the company is entitled to receive tiered double-digit royalty payments of up to the mid-teens on a percentage basis on potential future net sales of the Products in the U.S., and high single-digit royalty payments on potential future net sales of the Products outside the U.S. In addition, the company will transfer its existing arbaclofen placarbil investigational new drug applications, INDs, know-how and other related data to Reckitt, and the company will provide technology transfer assistance to Reckitt to facilitate the establishment of Reckitt’s manufacturing and supply capabilities pursuant to a transition plan to be mutually agreed upon.