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May 9, 2013

Cash-Strapped Unigene Gets $1M Boost from Nordic

  • Unigene Laboratories and Nordic Bioscience have entered into an equity transfer and exclusive license agreement involving three metabolic peptide analogs for type 2 diabetes, osteoarthritis, and osteoporosis developed jointly through a partnership they entered in October 2011. In August 2012, the companies selected UGP302 as their lead compound for type 2 diabetes.

    Under the terms of the agreement, Nordic will pay $1 million for Unigene’s ownership interest in the Joint Development Vehicle (JDV)-associated metabolic peptide analogs. As a result, Unigene grants Nordic an exclusive, royalty-bearing license to develop and commercialize products incorporating any of the three licensed analogs.

    In return, Unigene will be entitled to double-digit royalties from the net sales of any of the licensed products that incorporate Unigene's oral formulation technology, and single-digit royalties from the net sales of those that do not. Additionally, the firm is entitled to receive 25% of any license fees or milestone payments in the event Nordic sublicenses any of the compounds.

    "The 302 molecule and family of peptides are extremely interesting and have been optimized to provide the ideal receptor binding profile for type 2 diabetes and osteoarthritis. As such, we are confident these peptides will deliver an efficacy and combination of effects that is superior to other development programs,” Nordic Bioscience CEO Morten Karsdal said in a statement. “Provided the toxicology studies advance as expected, our plan is to initiate the first clinical study early next year."

    Unigene CEO Ashleigh Palmer said that, pursuant to the terms of a forbearance agreement involving the company’s senior lenders, Victory Park Capital (VPC), his firm will remit the proceeds of the equity transfer transaction to be applied to outstanding senior secured notes. VPC has agreed to re-loan $500,000 of that amount to help extend Unigene’s cash runway, he added.

    Commenting on his firm’s newly announced deal with Nordic Bioscience, Palmer said: “We could not be more pleased given our current challenging corporate circumstances.” However, he added, “Unigene's ability to leverage this agreement to secure additional opportunities is very much contingent upon resolving our current debt situation. We remain in discussions with VPC regarding the potential conversion of VPC's remaining debt into additional Unigene equity.” Palmer also noted that any such conversions would be subject to the consent, cooperation, and agreement of all parties involved in Unigene’s debt situation, including the company’s junior lenders, the Jaynjean Levy Family Limited Partnership.


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