Australia's Phosphagenics Ltd. agreed to settle an arbitration over an antibiotic drug partnership with a unit of Canonsburg, Pa.-based Mylan NV.
Phosphagenics had sued Mylan Laboratories Ltd. in January 2016 for breaching terms under licensing and master research agreements it originally entered with Agila Specialties Pte. Ltd., which Mylan acquired in 2013.
The agreements covered daptomycin, a treatment for infections caused by Gram-positive organisms. Merck & Co. Inc. markets daptomycin as Cubicin.
Mylan was to continue developing daptomycin with Phosphagenics' proprietary drug delivery system — tocopheryl phosphate mixture, or TPM — not sell a generic version of the treatment. Phosphagenics expected TPM-daptomycin to have commercial advantages over formulations such as Cubicin.
The Singapore International Arbitration Centre, or SIAC, eventually dismissed Phosphagenics' claims in November, causing an 88.46% drop in the company's stock.
Under the settlement, the licensing and master research agreements have been terminated, and the companies agreed to not charge each other for their arbitration and legal costs.
Mylan also gained full rights to market TPM-daptomycin as it sees fit. Phosphagenics will receive a 5% net sales royalty from Mylan, and exclusively supply TPM at up to a 25% premium, subject to its supply capability. Likewise, Phosphagenics gained a nonexclusive license to develop, license and/or sell TPM-daptomycin, to which Mylan is also entitled to a 5% net sales royalty.
The companies have six months to execute arrangements under the settlement.
Separately, Phosphagenics also settled claims from Strides Pharma Asia Pte. Ltd., which originally granted Mylan the rights to TPM-daptomycin as part of the Agila Specialties acquisition.
Strides agreed to drop its claims in exchange for £100,000 in cash, plus the lesser of £5 million and certain arbitration costs it submitted to the SIAC. The additional payment will come as a discount on the upfront, milestone and/or royalty payments associated with any and all deals Strides has completed with Phosphagenics.
Phosphagenics said it had spent about A$5.6 million on arbitration and legal fees when the SIAC dismissed its claims. The company, which has about A$2.1 million cash on hand, said the settlements remove the potential for a substantial adverse costs order from Mylan and Strides.