NT amends terms of memantine deal

Neurobiological Technologies has amended a license and cooperation agreement with Germany's Merz Pharmaceuticals GmbH and fellow USA-based Childrens' Medical Center Corp relating to their co-developed Alzheimer's disease drug memantine, which is marketed in the USA as Namenda and in Europe as Ebixa.

The change modifies the terms of the royalties to be paid to the company on sales of memantine, including discontinuing the payment of royalties on turnover for AD outside of the USA, beginning in the fourth quarter of 2007, and providing for a staged reduction in the royalty rates to be paid to the company and CMCC on US income from the drug beginning in the third quarter of 2008. In addition, the amendment provides that neither CMCC nor Merz will give notice of termination of the agreement under the section relating to the development of memantine for the CMCC indications before July 1, 2009, or to be effective before January 1, 2010.

"We felt it was important to agree to this amendment to reduce the uncertainty relating to the ability of Merz and CMCC to terminate the agreement on six months' notice and to give us greater assurance that we will continue to receive royalty payments on US sales of memantine for at least the next two years, which will be a critical period for our company as we complete our pivotal Phase III clinical trials of Viprinex for ischemic stroke," said Paul Freiman, chief executive of NT. "As we effectively receive our payments two quarters after the memantine sales are made, this means that we should receive royalty payments from Merz, albeit at reduced rates, until the second quarter of 2010," he added.