Summary
Amgen Inc. (AMGN) announced on April 24, 2017, a significant material definitive agreement, a Collaboration Agreement, entered into on April 21, 2017, with Novartis Pharma AG. This agreement focuses on the U.S. commercialization of erenumab, a drug for migraine. Under this new agreement, Amgen will book U.S. sales, share U.S. commercialization expenses, and pay Novartis a significant royalty on net sales. This collaboration builds upon an existing Exclusive License and Collaboration Agreement from August 2015. The terms indicate that Novartis will provide substantial financial support, including milestone payments potentially exceeding $400 million, and will assume a disproportional amount of global R&D expenses up to a cap, after which costs will be shared. Novartis will also fund a portion of U.S. commercialization costs in 2017 and 2018, with equal sharing thereafter. Amgen will be responsible for manufacturing erenumab in the United States.
Key Highlights
- 1Amgen entered into a Collaboration Agreement with Novartis for the U.S. commercialization of erenumab.
- 2Novartis will make milestone payments to Amgen exceeding $400 million.
- 3Amgen will book U.S. sales of erenumab, while sharing U.S. commercialization expenses with Novartis.
- 4Novartis will assume a significant portion of global R&D expenses for erenumab, up to a certain cap.
- 5The agreement outlines a shared responsibility for U.S. commercialization costs, with Novartis funding a portion in 2017-2018 and equal sharing thereafter.
- 6Amgen will manufacture erenumab for the United States market.
- 7The collaboration is governed by joint bodies and continues for the commercial life of the products.