Perth-based SUDA Pharmaceuticals (ASX: SUD) has entered into an exclusive licence agreement with Mitsubishi Tanabe Pharma Singapore Pte Ltd for sales of its ZolpiMist anti-insomnia oral spray in the Asian market.
The supply and distribution agreement, which includes an option period of 12 months, will commence with Singapore, Malaysia and the Philippines and extend into Thailand, Indonesia, Vietnam, Myanmar, Cambodia, Laos and Brunei.
Under the terms of the agreement, SUDA will receive an upfront fee of $139,000 and milestone payments of $55,000 per country based on Mitsubishi obtaining regulatory approvals.
It will also include commercial milestone payments based on Mitsubishi achieving sales targets of ZolpiMist, with a maximum milestone payment of $904,000.
On exercising the option, Mitsubishi will pay SUDA $48,000 followed by milestone payments of $34,000 per country as regulatory approvals are obtained.
SUDA will receive a double-digit royalty payment based on net regional sales of the product.
The companies will form a joint development and management committee to co-ordinate activities and ensure success of ZolpiMist within Asia.
“We have been in discussion with Mitsubishi for several months and are very excited [at] the prospect of this partnership which will expand ZolpiMist coverage across Asia,” said SUDA executive chairman Stephen Carter.
“We continue to focus on out-licensing ZolpiMist and are progressing further negotiations in a number of countries.”
Marketed as SUDA’s “first-in-class, fast-acting oral spray” of zolpidem tartrate for insomnia, ZolpiMist promotes reduced sleep latency, patient convenience, and ease of use as it is administered without water, unlike conventional tablets.
Last month, SUDA announced an exclusive licensing agreement with Chinese specialty pharmaceutical company Eddingpharm for sales in mainland China, and with Israeli multi-national provider Teva Pharmaceuticals for parts of South America.
Teva has lodged marketing approval for ZolpiMist sales in Chile and is working closely with SUDA to evaluate and progress markets in Brazil and Mexico.
SUDA has also received interest in ZolpiMist from companies in the Middle East, North Africa and Europe.
Closer to home, Mr Carter said a marketing application will be lodged in the new year with the Australian Therapeutic Goods Administration for the approval of ZolpiMist in the Australian market.
He said SUDA had commenced the search for a local partner.
Standard business model
SUDA’s agreements and negotiations are based on the company’s standard business model of product supply and upfront payment, followed by payments for achieving regulatory and sales milestones.
Further to these payments, SUDA receives a handling fee as well as double digit royalties on sales.
The company’s current 10-year forecast (after approvals) on signed deals is approximately $83 million.
Based on current agreements, SUDA has already received $0.97 million in upfront fees and will potentially receive $2 million in milestone payments.
At mid-morning, shares in SUDA Pharmaceuticals were trading 20% higher at $0.006.