I was rereading Starpharma's ASX announcement of 20 December 2018 regarding their licence agreement for USA for VivaGel to try to get some idea of cash flows from it. I've copied the words below. Can anyone throw light on the paragraph I've highlighted regarding TWO BV indications - what they are; what that means and the likely outcome of it?
US VivaGel® BV licensed for A$142M milestones, plus royalties
• Starpharma has licensed VivaGel® BV for the US to ITF Pharma
• Deal terms include up to US$101M (A$142M) in milestones, in addition toescalating double-digit royalties on sales
• Milestones comprise US$20M (A$28M) in FDA approval milestones for the two BVindications and up to US$81M (A$114M) in commercial milestones
• ITF Pharma is a specialty pharmaceutical company focused on Women'sHealth and will significantly expand its dedicated sales force for the launch ofVivaGel® BV
• ITF Pharma is a subsidiary of multinational pharmaceutical company,Italfarmaco SpA
• VivaGel® BV's New Drug Application is currently undergoing FDA priority reviewwith Fast Track statusMelbourne, Australia; 20 December 2018:
Starpharma (ASX: SPL, OTCQX: SPHRY) andITF Pharma today announced they have signed a licence for the sales and marketing rightsto VivaGel® BV in the United States. Starpharma will be eligible to receive up to US$101M(A$142M) in regulatory approval and commercialisation milestones in addition to attractivetiered royalties on sales.VivaGel® BV is a novel, non-antibiotic therapy for bacterial vaginosis (BV) - the mostcommon vaginal infection in the world and twice as common as thrush. There is a particularlyhigh prevalence of BV amongst US women (1 in 3 women, with around two thirdsexperiencing recurrent episodes). The global market for BV treatment is estimated to be-US$750 million and -US$1 billion for prevention of recurrent BV.ITF Pharma is a US-based specialty pharmaceutical company with a focus on prescriptionWomen's Health products through its Womens Choice Pharmaceuticals Division(www.wcpharma.com). ITF Pharma is the US subsidiary of the leading private multinationalpharmaceutical company, Italfarmaco SpA which employs around 3,100 people globally andhas annual sales turnover of more than €720M.Upon launch, VivaGel® BV will become ITF Pharma's top priority Women's Health product.Under the licence, ITF Pharma have committed to a substantial investment in sales,marketing and reimbursement activities ahead of the US launch of VivaGel® BV includingsignificantly expanding its dedicated Women's Health salesforce to 60 specialisedrepresentatives. ITF Pharma's experienced salesforce will utilise specialised sales sectorintelligence tools in optimising these efforts. ITF Pharma's sales and marketing capabilitiesinclude a team of dedicated telemarketing and digital marketing professionals who willcomplement its sales representatives in the field.ITF Pharma's management team has extensive Women's Health experience in thepharmaceutical industry gained in companies including Ferring, Wyeth, Pfizer, Allergan,Actavis, Abbott, RPR and CSL. ITF Pharma's sales and marketing organisation has animpressive track record in selling Women's Health products in the US.US VivaGel® BV licensed for A$142M milestones, plus royaltiesStarpharma has licensed VivaGel® BV for the US to ITF Pharma
Deal terms include up to US$101M (A$142M) in milestones, in addition toescalating double-digit royalties on sales
Milestones comprise US$20M (A$28M) in FDA approval milestones for the two BVindications and up to US$81M (A$114M) in commercial milestones
ITF Pharma is a specialty pharmaceutical company focused on Women’sHealth and will significantly expand its dedicated sales force for the launch ofVivaGel® BVITF Pharma is a subsidiary of multinational pharmaceutical company,Italfarmaco SpAVivaGel® BV’s New Drug Application is currently undergoing FDA priority reviewwith Fast Track statusMelbourne, Australia; 20 December 2018: Starpharma (ASX: SPL, OTCQX: SPHRY) andITF Pharma today announced they have signed a licence for the sales and marketing rightsto VivaGel® BV in the United States. Starpharma will be eligible to receive up to US$101M(A$142M) in regulatory approval and commercialisation milestones in addition to attractivetiered royalties on sales.VivaGel® BV is a novel, non-antibiotic therapy for bacterial vaginosis (BV) - the mostcommon vaginal infection in the world and twice as common as thrush. There is a particularlyhigh prevalence of BV amongst US women (1 in 3 women, with around two thirdsexperiencing recurrent episodes). The global market for BV treatment is estimated to be~US$750 million and ~US$1 billion for prevention of recurrent BV.ITF Pharma is a US-based specialty pharmaceutical company with a focus on prescriptionWomen’s Health products through its Womens Choice Pharmaceuticals Division(www.wcpharma.com). ITF Pharma is the US subsidiary of the leading private multinationalpharmaceutical company, Italfarmaco SpA which employs around 3,100 people globally andhas annual sales turnover of more than €720M.Upon launch, VivaGel® BV will become ITF Pharma’s top priority Women’s Health product.Under the licence, ITF Pharma have committed to a substantial investment in sales,marketing and reimbursement activities ahead of the US launch of VivaGel® BV includingsignificantly expanding its dedicated Women’s Health salesforce to 60 specialisedrepresentatives. ITF Pharma’s experienced salesforce will utilise specialised sales sectorintelligence tools in optimising these efforts. ITF Pharma’s sales and marketing capabilitiesinclude a team of dedicated telemarketing and digital marketing professionals who willcomplement its sales representatives in the field.ITF Pharma’s management team has extensive Women’s Health experience in thepharmaceutical industry gained in companies including Ferring, Wyeth, Pfizer, Allergan,Actavis, Abbott, RPR and CSL. ITF Pharma’s sales and marketing organisation has animpressive track record in selling Women’s Health products in the US.D lstarenarmaUnder the licence, Starpharma is eligible to receive up to US$101M (A$142M) in regulatoryapproval and commercialisation milestones in addition to escalating double-digit royalties onsales. The milestones comprise US$20M (A$28M) in regulatory approval milestones for thetwo BV indications and up to US$81M (A$114M) in commercial milestones. InitiallyStarpharma will be responsible for supplying VivaGel® BV to ITF Pharma, however, in thefuture, Italfarmaco may apply for FDA approval of its own manufacturing facility.Starpharma is responsible for regulatory activities for VivaGel® BV while ITF Pharma will beresponsible for all commercialisation activities, including product launch, market pricing,reimbursement, marketing, promotion and sales.The regulatory process for VivaGel® BV in the US is already well-advanced. Starpharma'sNew Drug Application (NDA) for VivaGel® BV is currently undergoing FDA priority reviewunder Fast Track status, following acceptance of the NDA in July 2018.Commenting on the licence, Dr Jackie Fairley, CEO of Starpharma said: "We are delighted tolicence VivaGel® BV to ITF Pharma for the US. ITF Pharma is an organisation with a strongpedigree in Women's Health, a high calibre commercial team and a great deal of sales andmarketing experience in the category. We look forward to working with them to bring thishighly anticipated and innovative product to women throughout the US"."There are currently no approved products in the US for prevention of recurrent BV, andfeedback from clinicians and patients indicate a strong interest in new BV therapies.Following approval and launch of VivaGel® BV, these patients will finally have an effective,non-antibiotic BV treatment and an approved product for recurrent BV", added Dr Fairley.Dennis Willson, ITF Pharma CEO, commented: "We're very pleased to be partnering withStarpharma in an area of such significant unmet need, with this innovative product. VivaGel®BV has been described as life-changing' by BV patients in the US. We think it's abreakthrough product in the management and prevention of BV".The term of the US licence with ITF Pharma is the later of 10 years or patent expiry (at least2030 with potential extensions out to 2033) and includes customary provisions to extend theagreement. There are binding performance obligations on ITF Pharma, includingcommitment to launch within a specified timeframe and minimum annual purchases for theduration of the agreement as well as termination provisions under certain circumstances. Allother commercial terms of the agreement remain confidential.About VivaGeP BVVivaGel® BV is a patented, water-based vaginal gel for the treatment of bacterial vaginosis (BV) and prevention of recurrent BV. VivaGel® BV is abreakthrough product which specifically targets the organisms that cause BV, rapidly relieves symptoms and has a novel mechanism of actionaffecting biofilm. VivaGel® BV is a non-antibiotic therapy and is not absorbed into the bloodstream.The VivaGel® BV treatment product targets an area of significant unmet medical need in a high-value market (est. US$750M). Prevention ofrecurrent BV is another high value market (est. US$1B) for VivaGel® BV which stands to be the first in class in the US as there are no otherapproved products to prevent recurrent BV in the US.About Bacterial Vaginosis (BV)Bacterial vaginosis is the most common cause of vaginal infection for women of childbearing age and affects around 30% of women in the US. It isa highly recurrent condition with 50-60% of sufferers having it recurrently. BV is caused by an imbalance of naturally occurring bacterial flora (theusual bacteria found in a woman's vagina). Current therapies for BV are inadequate and have many unpleasant side-effects, there are also noother approved products in the US for recurrent BV making VivaGel® BV a first-in-class therapy supported by large, randomised clinical studies.About ITF Pharma, Inc.ITF Pharma is a subsidiary of Italfarmaco S.p.A, a privately held European specialty pharmaceutical company. ITF Pharma's main emphasis is onsales and marketing of women's health, urology and neurology products. The ITF Pharma field sales representatives are strategically located inoptimal locations throughout the US. They focus their promotional efforts exclusively on high-volume, office-based OBIGYN's and Urologists, aswell as clinic-based neurologists. In addition to field sales representatives, ITF Pharma have a tele-detailing team that focuses on physicians insmaller markets and white spaces, while a national account team is focused on selected wholesalers, PBM's, MCO's and Medicaid programs.2 2Under the licence, Starpharma is eligible to receive up to US$101M (A$142M) in regulatoryapproval and commercialisation milestones in addition to escalating double-digit royalties onsales. The milestones comprise US$20M (A$28M) in regulatory approval milestones for thetwo BV indications and up to US$81M (A$114M) in commercial milestones. InitiallyStarpharma will be responsible for supplying VivaGel® BV to ITF Pharma, however, in thefuture, Italfarmaco may apply for FDA approval of its own manufacturing facility.Starpharma is responsible for regulatory activities for VivaGel® BV while ITF Pharma will beresponsible for all commercialisation activities, including product launch, market pricing,reimbursement, marketing, promotion and sales.The regulatory process for VivaGel® BV in the US is already well-advanced. Starpharma’sNew Drug Application (NDA) for VivaGel® BV is currently undergoing FDA priority reviewunder Fast Track status, following acceptance of the NDA in July 2018.Commenting on the licence, Dr Jackie Fairley, CEO of Starpharma said: “We are delighted tolicence VivaGel® BV to ITF Pharma for the US. ITF Pharma is an organisation with a strongpedigree in Women’s Health, a high calibre commercial team and a great deal of sales andmarketing experience in the category. We look forward to working with them to bring thishighly anticipated and innovative product to women throughout the US”.“There are currently no approved products in the US for prevention of recurrent BV, andfeedback from clinicians and patients indicate a strong interest in new BV therapies.Following approval and launch of VivaGel® BV, these patients will finally have an effective,non-antibiotic BV treatment and an approved product for recurrent BV”, added Dr Fairley.Dennis Willson, ITF Pharma CEO, commented: “We’re very pleased to be partnering withStarpharma in an area of such significant unmet need, with this innovative product. VivaGel®BV has been described as ‘life-changing’ by BV patients in the US. We think it’s abreakthrough product in the management and prevention of BV”.The term of the US licence with ITF Pharma is the later of 10 years or patent expiry (at least2030 with potential extensions out to 2033) and includes customary provisions to extend theagreement. There are binding performance obligations on ITF Pharma, includingcommitment to launch within a specified timeframe and minimum annual purchases for theduration of the agreement as well as termination provisions under certain circumstances. Allother commercial terms of the agreement remain confidential.About VivaGel® BVVivaGel® BV is a patented, water-based vaginal gel for the treatment of bacterial vaginosis (BV) and prevention of recurrent BV. VivaGel® BV is abreakthrough product which specifically targets the organisms that cause BV, rapidly relieves symptoms and has a novel mechanism of actionaffecting biofilm. VivaGel® BV is a non-antibiotic therapy and is not absorbed into the bloodstream.The VivaGel® BV treatment product targets an area of significant unmet medical need in a high-value market (est. US$750M). Prevention ofrecurrent BV is another high value market (est. US$1B) for VivaGel® BV which stands to be the first in class in the US as there are no otherapproved products to prevent recurrent BV in the US.About Bacterial Vaginosis (BV)Bacterial vaginosis is the most common cause of vaginal infection for women of childbearing age and affects around 30% of women in the US. It isa highly recurrent condition with 50-60% of sufferers having it recurrently. BV is caused by an imbalance of naturally occurring bacterial flora (theusual bacteria found in a woman's vagina). Current therapies for BV are inadequate and have many unpleasant side-effects, there are also noother approved products in the US for recurrent BV making VivaGel® BV a first-in-class therapy supported by large, randomised clinical studies.About ITF Pharma, Inc.ITF Pharma is a subsidiary of Italfarmaco S.p.A, a privately held European specialty pharmaceutical company. ITF Pharma’s main emphasis is onsales and marketing of women’s health, urology and neurology products. The ITF Pharma field sales representatives are strategically located inoptimal locations throughout the US. They focus their promotional efforts exclusively on high-volume, office-based OB/GYN’s and Urologists, aswell as clinic-based neurologists. In addition to field sales representatives, ITF Pharma have a tele-detailing team that focuses on physicians insmaller markets and white spaces, while a national account team is focused on selected wholesalers, PBM’s, MCO’s and Medicaid programs.
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