KemPharm (NSDQ:KMPH) said yesterday it inked a collaborative licensing deal with KVK Tech to obtain U.S. commercial rights to the company’s FDA-approved Apadaz drug.
Through the agreement, KemPharm is eligible to receive approximately $3.4 million in pre-launch payments and core cost reimbursement, including a $2 million milestone payment “related to the initial formulary adoption of Apadaz. The deal also includes an aggregate of up to $53 million in milestone payments related to net sales levels.
Net profits from the deal will be shared between KemPharm and KVK up to 50%, depending on net sales level achievements, KemPharm said. KVK will maintain exclusive rights for all commercial, manufacturing, packaging and distribution activities for Apadaz in the US and will be responsible for regulatory and commercialization-related expenses.
The cost of pre-launch expenses including API cost and other material manufacturing, as well as validation batches, inventory investments and launch-specific costs, will shift from KemPharm to KVK, the companies said.
“Securing this agreement with KVK is an important step forward toward the commercial launch of Apadaz, a product which we believe offers a differentiated treatment option for the short-term management of acute pain. We believe Apadaz is now well-positioned for commercial launch since this agreement puts significant manufacturing and distribution capabilities in place and opens the door to further discussions with payers regarding the utilization of Apadaz in their health plans. As one would expect, KVK undertook extensive due diligence and conducted its own market research regarding KemPharm’s proposed commercial plan for Apadaz through its existing relationships with various PBM’s and MCO’s. We both agree there appears to be a substantial market opportunity for the replacement of current hydrocodone/acetaminophen products with Apadaz. Additionally, as a result of our collaboration, KemPharm has the opportunity to gain greater financial flexibility because of the pre-launch payments, cost-sharing, reimbursements and potential revenue stream from both sales milestones and profit share on a go-forward basis. We are extremely pleased with this opportunity to partner with KVK for the commercial launch of Apadaz,” KemPharm prez & CEO Travis Mickle said in a press release.
“Since our founding, KVK Tech has strived to become a trusted leader in generics manufacturing and distribution. Our business philosophy is built on a commitment to excellence with a focus on three core values: Safety, GMP Compliance, and Productivity. We have built a reputation of providing quality products on-time, even when other manufacturers experience supply disruptions. Apadaz represents an excellent opportunity to provide physicians and patients with a more differentiated product than currently available on the market today, and we look forward to using our expertise, together with KemPharm, to successfully launch Apadaz,” KVK Tech prez & CEO Anthony Tabasso said in a prepared statement.