• Tuesday, June 20, 2023 @ 7:00 am

Santhera Pharmaceuticals (SIX:SANN) announces that it has signed an exclusive license and collaboration agreement for vamorolone in North America (NA) with Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX), a commercial-stage biopharmaceutical company focused on novel medicines for patients living with rare diseases. Total consideration to Santhera is up to USD 231 million (incl equity investment), plus royalty payments from product sales, with near-term cash proceeds for Santhera of USD 126 million.

  • Santhera will receive USD 90 million upfront at closing (USD 75 million in cash and USD 15 million equity investment), an additional USD 10 million upon U.S. FDA approval of vamorolone in Duchenne muscular dystrophy (DMD) plus USD 26 million to pay approval related regulatory milestones to third parties, and potential sales milestones of up to USD 105 million
  • Agreement covers commercialization of vamorolone in DMD and rights to all potential future indications in North America (NA)
  • Catalyst will pay Santhera up to low-teen percentage royalties and will assume corresponding third-party royalty obligations on vamorolone sales in NA
  • Santhera will continue to focus on European commercialization of vamorolone in DMD, and further development of its clinical pipeline
  • Santhera and Catalyst intend to collaborate on joint clinical development and funding of vamorolone for additional indications beyond DMD
  • Proceeds allow for repayment of all short-term debt with Highbridge and an overall strengthening of the balance sheet

Under the terms of the agreement, Santhera will grant Catalyst exclusive commercialization rights to vamorolone in North America, comprising the U.S., Canada and Mexico. At closing, Santhera will receive an upfront cash payment of USD 75 million. In addition, Catalyst will make an equity investment of USD 15 million through the purchase of 14,146,882 treasury shares at a price of CHF 0.9477 per share which corresponds to the ten-day volume-weighted average price ending two days prior to signing of the agreement, subject to a six-month post-closing lock-up and standstill. Use of proceeds from the equity investment will support Phase 4 studies in DMD and joint development of additional indications. Upon U.S. FDA approval of vamorolone in DMD, a decision expected on October 26, 2023 (PDUFA date), Santhera would receive an additional USD 36 million from Catalyst, of which Santhera would pay contractually agreed third-party regulatory milestone obligations (USD 26 million). Furthermore, Catalyst may pay Santhera sales-based milestones of up to USD 105 million as well as up to low-teen percentage royalties and will assume corresponding third-party royalty obligations of Santhera on vamorolone sales in all indications in NA.

Dario Eklund, Chief Executive Officer of Santhera, commented: “Duchenne muscular dystrophy is a devastating condition. Everyone at Santhera has been working diligently to advance vamorolone in order to make this important treatment option available to patients. We believe Catalyst is well placed to maximize the value of vamorolone and, subject to regulatory approval, ensure patients in North America receive this transformational therapy as quickly as possible. Catalyst has a track record of success in the rare disease and neuromuscular space and is our commercial partner of choice for North America with an established infrastructure and commitment to patients. With our new partner, we also look forward to jointly address the benefits of vamorolone in additional indications. As part of this agreement, Santhera benefits from upfront, milestone and royalty payments which allows us to focus on the commercial roll-out of vamorolone in DMD and future other indications in Europe.”

In Europe, Santhera plans to commercialize vamorolone in key geographies (including Germany, France, UK, Italy, Spain, Benelux), and will seek partners for commercialization in all other countries. Market access, the build-up of a core organization and stakeholder engagement activities in these priority countries are ongoing. Already ahead of the European approval decisions expected at year-end, the early access programs submitted in the UK and France could allow treatment of first DMD patients with vamorolone. For certain countries, where Santhera chooses not to market vamorolone directly, including certain European countries and Japan, it has granted Catalyst a right of first negotiation in partnering discussions.

The new drug application (NDA) for vamorolone in DMD is under review in the U.S. by FDA, which has set October 26, 2023 as the Prescription Drug User Fee Act (PDUFA) date for its regulatory decision on approval. In Europe, the review of the marketing authorization application (MAA) for vamorolone by the European Medicines Agency (EMA) is ongoing. An opinion from the Committee for Medicinal Products for Human Use (CHMP) is expected in Q3-2023, followed by an approval decision by the European Commission (EC) in late 2023. In the UK, a corresponding MAA is under review by the Medicines and Healthcare products Regulatory Agency (MHRA). Subject to approvals, vamorolone could be launched in both the first EU countries and the U.S. in late 2023 and early in the first quarter 2024, respectively.

For indications in addition to DMD, Santhera and Catalyst will establish a joint steering committee (JSC) to undertake the joint clinical development of vamorolone for global indications, in which both parties would participate in the development process and funding.

The closing of the transaction is expected to occur early in the third quarter 2023, subject to customary conditions and regulatory clearances in the United States.

Funding Outlook
The near-term proceeds from the agreement with Catalyst amount to USD 100 million (cash inflows of USD 126 million net of regulatory approval milestone obligation to third parties of USD 26 million). This substantial infusion of funds significantly extends the Company’s cash reach into Q1-2025, providing a strong financial foundation for future endeavors including advancing development of vamorolone and European commercialization. In addition, funds will also be allocated towards the repayment of the exchangeable notes facility to Highbridge, resulting in a substantial reduction in debt and strengthening the Company’s financial position.

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