pSivida announced an amendment of its exclusive license and collaboration agreement with Alimera Sciences that grants Alimera rights to pSivida’s Durasert 3-year treatment for posterior segment uveitis (Durasert) in Europe, the Middle East, and Africa (EMEA). With this license, Alimera plans to pursue a secondary indication for Iluvien for posterior segment uveitis in EMEA, which could accelerate the uveitis indication approval as well as commercialization. pSivida retains commercialization rights for posterior segment uveitis in all other countries, including the United States. The amended agreement also modifies the companies’ existing global licensing agreement for Iluvien for the treatment of diabetic macular edema (DME).
Key terms of the restructured global licensing agreement for Iluvien include:
- pSivida grants Alimera the rights to Durasert in EMEA under the Iluvien trademark in exchange for tiered sales-based royalty payments.
- Converts the existing profit share arrangement for the global Iluvien DME indication to the same tiered sales-based royalty payments as the uveitis indication effective July 1, 2017, and improves pSivida’s revenue generation from DME indication sales.
- Sales-based royalty payments to pSivida start at 2% and increases to 6% upon the earliest of (i) Alimera’s receipt of the first EU country marketing approval for Iluvien for the treatment of posterior segment uveitis; (ii) January 1, 2019 and (iii) one year from Alimera’s filing of a marketing authorization application in the EU for posterior segment uveitis. The sales-based royalty payment will rise to 8% based on total Iluvien revenues in excess of $75 million in any calendar year.
- Under the previous agreement, pSivida’s net profits were to be partially offset by accumulated net Iluvien commercialization losses. The balance of accumulated losses has now been capped at $25 million, of which $10 million is cancelled in exchange for granting Alimera license rights for posterior uveitis in EMEA. An additional $5 million will be cancelled based on certain milestones achieved by Alimera. The remaining $10 million of accumulated Iluvien commercialization losses is subject to a partial offset against sales-based royalty payments over time.
- pSivida will withdraw its EU marketing approval application (MAA) and orphan drug designation for posterior segment uveitis and Alimera will be responsible for filing a Type II variation for Iluvien for the treatment of posterior segment uveitis in the 17 countries in the EU where Iluvien is currently approved for the treatment of DME.
Benefits of the EMEA out-license and revised Iluvien agreement for pSivida include:
- Standardizes and improves revenue generation from the Iluvien global collaboration agreement and is expected to provide a more predictable and steady flow of revenue for pSivida.
- Management of EMEA regulatory filings and manufacturing is transferred to Alimera, thereby potentially accelerating the uveitis indication approval and commercialization timing.
- Leverages Alimera’s established EMEA Iluvien field force with retinal specialists.
- Reduces pSivida’s financial outlays for European regulatory and manufacturing matters, allowing pSivida to focus resources on the new drug application (NDA) with the FDA and commercialization readiness efforts for Durasert for posterior segment uveitis in the US.
“Today’s announcement fulfills a core pSivida objective to out-license Durasert EMEA rights as a means to optimize product value,” Nancy Lurker, President and CEO of pSivida, said in a company news release. “We believe the EMEA out-license to Alimera, a company that is familiar with the complexity of the EU reimbursement environment and is currently marketing to target specialty physicians, could accelerate commercialization uptake and revenue realization for pSivida. The EMEA revenue opportunity for Durasert is estimated to be $30 to $50 million, and in the US it is estimated to be $80 to $120 million. We remain on track to file an NDA with the FDA by the end of this year. In parallel, the restructured global collaboration agreement benefits our shareholders as we immediately begin to recognize royalty income from sales of Iluvien as well as increase its long-term revenue opportunity.”