Monday, December 24, 2018
Recro Pharma, Inc., a revenue generating specialty pharmaceutical company focused on therapeutics for the hospital and other acute care settings, today announced an amendment to its global licensing agreement with Alkermes Pharma Ireland Limited (Alkermes) concerning the milestone payments for intravenous (IV) meloxicam. A New Drug Application (NDA) for IV meloxicam is currently under review by the U.S. Food and Drug Administration (FDA) and the Company is currently awaiting its assigned PDUFA goal date of March 24, 2019.
Under the prior agreement as amended, Recro Pharma owed Alkermes a milestone payment of $45 million upon approval of IV meloxicam by the FDA. This newly executed amendment provides that Recro Pharma will now pay to Alkermes $5 million within 30 calendar days following the amendment effective date, $5 million in April 2019, and $5 million within 180 days following approval of IV meloxicam by the FDA. Recro Pharma will then pay to Alkermes a total of $45 million in seven equal annual payments of $6.4 million each, commencing upon the first anniversary following FDA approval. In connection with the amendment Recro will also reprice the original warrants issued to Alkermes at market pricing plus a 20% premium, at a strike price of $8.26. The combined revised consideration for the amended milestone payment results in a net present value of $45M utilizing an approximate discount rate of 11%.
“We are extremely pleased to execute this new amendment with our partner Alkermes, providing greater financial flexibility as we prepare for the upcoming approval decision for IV meloxicam and subsequent planned product launch, if approved,” said Gerri Henwood, Recro Pharma's President and Chief Executive Officer. “The amendment will reduce our cash requirements for 2019 by approximately $30 million and extends the payments over a seven year period.”
