Evoke Pharma Inc. reached an agreement with Mallinckrodt PLC to defer certain milestone payments related to a drug called Gimoti.
The company was required to pay $1.5 million once the U.S. Food and Drug Administration accepted the drug's application for review and then a further $3 million once it was approved.
However, Solana Beach, Calif.-based Evoke Pharma will now make a single payment one year after approval of the drug by the U.S. regulator. The company plans to file for the drug's U.S. approval in the second quarter of 2018.
Gimoti is meant to treat a gastrointestinal disorder known as gastroparesis which affects the stomach. Evoke Pharma plans to market the treatment to women.
The pharmaceuticals company acquired the drug from Questcor Pharmaceuticals Inc. in June 2007 for an upfront payment of $650,000 and made a milestone payment of $500,000 in May 2014.
Mallinckrodt, which acquired Questcor for $5.6 billion in August 2014, is now eligible to receive future milestone payments related to the medicine — estimated to be $51.5 million, including the aforementioned $4.5 million.