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January 31, 2007

Palatin Signs Obesity Deal Potentially Worth $310M with AstraZeneca

  • AstraZeneca and Palatin Technologies will together discover, develop, and commercialize small molecule compounds that target melanocortin receptors.

    The exclusive global licensing and research collaboration agreement is based on Palatin's melanocortin receptor obesity program. The near-term objective is to finalize selection of a lead drug candidate for clinical evaluation.

    Data accumulated from genetic, pharmacological, and physiological studies identify the central melanocortin system as a key regulator of energy homeostasis. This offers significant potential for the development of novel treatments for obesity, diabetes, and metabolic syndrome.

    Under the terms of the agreement, Palatin will receive an upfront payment of $10 million from AstraZeneca and is eligible for milestone payments totalling $300 million. Of these milestones, $180 million  is contingent upon development and regulatory hurdles and the balance on achievement of sales targets. The company will also received stepped royalties on product sales to double digit rates, dependent on sales achieved.

    AstraZeneca will assume responsibility for commercialization, discovery, and development costs, with both companies contributing scientific expertise in the research collaboration.