Wednesday, February 11, 2009

Novelos makes $85M international deal

By Marc Songini

Newton-based biotech company Novelos Therapeutics Inc. has made a deal worth a potential $85 million with Mundipharma International Corp. Ltd., allowing it to sell Novelos’ lead drug in Europe and Asia.

It also had raised another $10 million in a stock-related transaction. Novelos (OTCBB: NVLT), which develops drugs to treat cancer and hepatitis, announced this week that it had made an exclusive agreement with Mundipharma for the two regions, which does not include marketing in China. The transaction covers Novelos’ lead compound, NOV-002, now in a pivotal Phase 3 trial for non-small cell lung cancer under a Special Protocol Assessment and Fast Track.

Novelos claims that NOV-002 has shown positive results in Phase 2 trials for other cancer types, as well. As part of the agreement, Novelos may receive $25 million in launch milestones and $60 million in fixed sales-based payments. Additionally, Novelos will receive double-digit royalties that will rise as sales increase in the licensed territories. Mundipharma will handle some development activities, regulatory submissions and the commercialization of NOV-002. However, Novelos also retains all rights and responsibilities in the Americas.

In other news, Novelos said it had wrapped a private placement with Purdue Pharma LP. As part of this deal, it had realized $10 million in gross proceeds by selling convertible preferred stock and warrants to purchase its common stock.

Last August,  Novelos announced it had brought in $3 million from the sale of 4.6 million shares of common stock to two unnamed accredited investors.