Date: 2012-10-31
Type of information: Licensing agreement
Compound: hemophilia drug candidates IB1001 (recombinant factor IX - rFIX) and OBI-1 (recombinant porcine factor VIII - rpFVIII)
Company: Ipsen (France) Inspiration Biopharmaceuticals (USA)
Therapeutic area: Hematologic diseases - Genetic diseases - Rare diseases
Type agreement: licensing
development
commercialisation
Action mechanism:
Disease: acquired hemophilia A, congenital hemophilia A with inhibitors, treatment and prevention of bleeding in patients with hemophilia B
Details: Ipsen and Inspiration Biopharmaceuticals have announced new license, development and commercialization agreements. These agreements restructure the existing partnership with Ipsen and provide Inspiration with additional funding to support development of its two investigational drugs in late-stage development for hemophilia, IB1001 and OBI-1. The new agreement aims to establish an effective structure whereby Ipsen gains commercial rights in key territories. Inspiration remains responsible for the world-wide development of OBI-1 and IB1001. Under the new agreement and in its territories, Ipsen recovers commercial rights to OBI-1 (recombinant porcine factor VIII) and is granted commercial rights for IB1001 (recombinant human factor IX) . Consequently, Ipsen will record sales of OBI-1 and IB1001 in its drug sales line; and pay Inspiration a mid-teen royalty on OBI-1 sales and a higher double digit royalty on IB1001’s sales. Ipsen gains rights to commercialize IB1001 and OBI-1 in Europe, Russia, China, Australia and certain other countries, and will be responsible for future regulatory filings in those regions.
Inspiration retains commercialization rights in the Americas, Japan, India, the Middle East, South Africa, Taiwan and certain other countries, as well as global development rights for all products in Inspiration's product portfolio. Each company is obligated to pay the other royalties generated by sales of OBI-1 in their respective geographies and Ipsen will pay Inspiration royalties on sales of IB1001.
Inspiration and Ipsen's strategic partnership began in January 2010, and in August of 2011 was expanded in preparation for the commercial launch of Inspiration\'s first hemophilia products in Europe. The 2011 agreement established a European commercial partnership, which was designed to leverage the combined strengths of Ipsen\'s well-established European commercial infrastructure and medical network with Inspiration\'s expertise in the field of hemophilia. The new agreements will replace the previous European commercial partnership agreement.
Previous contractual obligations have also been reset, notably:
• The remaining potential $29.0m milestone payments by Ipsen are cancelled;
• Ipsen’s call option to acquire full control of Inspiration is now to expire upon successful refinancing of Inspiration;
• Ipsen will no longer act as Inspiration’s commercial agent, as such the European commercial organization is no longer billed to Inspiration.
As part of this new agreement, Ipsen will be entitled to appoint two additional members (out of a total of 9) to Inspiration’s Board of Directors.
Financial terms: As part of the renegotiation, Ipsen paid Inspiration $30.0 million (approximately €24.0 million, based on current exchange rates) upfront. Including this upfront payment, Ipsen is entitled to pay Inspiration milestones for a total amount of up to $200 million, of which $27.5 million are regulatory milestones and the remaining are commercial milestones.
This includes a commitment from Ipsen to fund a significant percentage of Inspiration\'s next round of external financing. Under the terms of the new agreements, after the completion of a $30 million qualified external financing Ipsen will invest an additional $20 million in Inspiration and will no longer have a call option to acquire Inspiration, giving Inspiration the ability to develop as an independent entity. Ipsen gains the right to appoint two additional Directors to Inspiration's Board.
Furthermore, under the new terms, Ipsen has agreed to invest up to $20.0 million in Inspiration, as
follows:
- If Inspiration raises external funding prior to August 31, 2012, Ipsen will pay $20.0 million in exchange for equity;
- If Inspiration does not raise external funding prior to August 31, 2012, Ipsen will pay $7.5 million and receive a warrant for 15% of Inspiration’s equity. Ipsen has an option to exercise the warrant should Inspiration fail to raise external funding by September 30, 2012;
- If Inspiration raises external funding prior to September 30, 2012, Ipsen will pay an additional $12.5 million in exchange for equity.
Both companies believe this new agreement will facilitate Inspiration’s ability to raise independent third party financing to meet its financing needs until a potential equity offering in 2013.
Latest news: * On October 31, 2012, Ipsen has announced that Inspiration Biopharmaceuticals has commenced a voluntary reorganization case pursuant to Chapter 11’s provisions of the United States Bankruptcy Code. Inspiration's Chapter11 case was filed on October 30, 2012 with the United States Bankruptcy Court in Boston, Massachusetts. With this filing, Inspiration is seeking to have the Bankruptcy Court’s approval on detailed bidding and auction procedures for the sale of its assets to a third party purchaser. Inspiration’s assets are notably comprised of commercial rights1 to OBI-1, a recombinant porcine factor VIII (rpFVIII) for the treatment of hemophilia A with inhibitors and IB1001, a recombinant factor IX (rFIX) for the treatment of hemophilia B. Through its $200 million of convertible bonds, Ipsen is Inspiration's only senior secured creditor. Ipsen has agreed to include its hemophilia assets in the sale process under certain conditions.
Ipsen’s assets are comprised of commercial rights to OBI-1 and IB1001 as well as its OBI-1 industrial facility in Milford (Boston, MA). In connection with the proposed asset sale, Inspiration and Ipsen will jointly mandate an investment bank for the transaction.
Under the Chapter 11 procedure, Ipsen has agreed to provide Inspiration with so-called: "Debtorin- Possession financing" (DIP) for an amount of up to $18.3 million assuming certain conditions are met. It is anticipated that the DIP financing will be sufficient to enable Inspiration and Ipsen to successfully achieve the sale to a third party purchaser. On the basis of available information, Ipsen's related impairment could result in the depreciation of part or all of the hemophilia-related assets on Ipsen’s balance sheet for a total non-cash and nonrecurring amount of around 120 million euros after tax (mainly composed of the convertible bonds, the Milford manufacturing site and the DIP financing). The ultimate charge will depend on the results of the auction process and the bankruptcy court's determination of the proceeds distribution to creditors therein.
* On October 3, 2012, Ipsen has announced that Inspiration Biopharmaceuticals had not raised third party financing by the contractual deadline of 30 September 2012. Consequently, Ipsen is no longer obligated to pay the additional $12.5 million in exchange for Inspiration equity. The parties continue to explore various options. On 31 August 2012, Ipsen paid Inspiration $7.5 million as part of the agreement renegotiated on 21 August 2012.
