Nuclear Medicine Company, Cyclopharm (ASX:CYC), has signed a 'term sheet' with Jubilant DraxImage, for the exclusive license to market and distribute Technegas in the US.
DraxImage is a wholly owned subsidiary of Jubilant Life Sciences. It will assist Cyclopharm with the development and financing of the Phase 3 clinical trials for Technegas, and any other steps required to file for and obtain US FDA approval.
The final License Agreement, expected to be completed within 60 to 90 days, will be subject to mutual due diligence and the necessary board approvals.
Under the commercial elements of the term sheet, DraxImage will provide at risk up to US$4.5M to fund the clinical trial currently under development with any additional costs to be funded by both parties equally.
In addition, upon successful completion of the trial, DraxImage will be able to convert trial costs into Cyclopharm common stock up to a maximum of 15 per cent of the company's total shareholding. It will also pay Cyclopharm a 17.5 per cent royalty in addition to an agreed margin above the cost of goods sold.
“Cyclopharm is thrilled with the opportunities this transaction represents," said Cyclopharm CEO, James McBrayer. "DraxImage is the market leader for nuclear medicine lung imaging in the USA. We are confident that the synergies that exist between the two organisations will ensure faster acceptance of our proprietary technology”.
DraxImage President Martyn Coombs also welcomed the agreement, saying the company is excited about the opportunity to partner with Cyclopharm in the development and launch of Technegas.