Like I mentioned earlier MSB disclosed plenty about the Cephalon deal in Dec 2010 (see below). The only thing that wasn't explicit was the percentage share that MSB would receive on sales. I asked about this at the following AGM and was told that while it was confidential, it was within industry norms which they identified at around 50%. Astoundingly good numbers for those that want to crunch the numbers.
MESOBLAST AND CEPHALON ENTER INTO STRATEGIC ALLIANCE TO COMMERCIALIZE NOVEL THERAPEUTIC PRODUCTS FOR REGENERATIVE MEDICINE
Cephalon to receive exclusive worldwide commercialization rights to selected Mesoblast products
Alliance to focus on degenerative conditions of neurologic and cardiovascular systems
Mesoblast to receive upfront fee of US$130 million and up to US$1.7 billion in milestone payments
Cephalon to acquire stake in Mesoblast at a 45% premium
Mesoblast cash balance of $250 million to fund other major indications including diabetes, autoimmune and inflammatory diseases, ophthalmic indications and key orthopedic bone and cartilage conditions
Melbourne, Australia; 8 December 2010 – Regenerative medicine company, Mesoblast Limited (ASX:MSB: USOTC:ADR) and global biopharmaceutical company, Cephalon, Inc. (Nasdaq: CEPH), today announced they have entered into a strategic alliance to develop and commercialize novel adult stem cell therapeutics for degenerative conditions of the central nervous and cardiovascular systems. These conditions include Parkinson’s disease, Alzheimer’s Disease, Congestive Heart Failure and Acute Myocardial Infarction. The alliance also extends to products for augmenting bone marrow transplantation in cancer patients.
Under the terms of the Development and Commercialization Agreement between the companies, in exchange for exclusive world-wide rights to commercialize specific products based on Mesoblast’s proprietary adult stem cell technology platform, Cephalon will make an upfront payment to Mesoblast totaling US$130 million (US$30 million upon Mesoblast shareholder approval) and regulatory milestone payments of up to US$1.7 billion. Mesoblast will be responsible for the conduct and expenses of certain Phase IIa clinical trials and commercial supply of the products. Cephalon will be responsible for the conduct and expenses of all Phase IIb and III clinical trials and subsequent commercialization of the products. Mesoblast will retain all manufacturing rights and will share significantly in the net product sales.
In addition, under the terms of a Stock Purchase Agreement and a Subscription Deed, Cephalon will make an equity investment to purchase a 19.99% stake in Mesoblast at A$4.35 per share, totaling approximately US$220 million or A$223 million. This price represents a 45% premium to the last 30 days’ volume weighted average price for Mesoblast shares. Cephalon has entered into a standstill agreement to limit its investment to 19.99% of Mesoblast common stock for the next 12 months, with a right to maintain its equity stake on a top up basis, subject to the Australian Securities Exchange. Cephalon Chief Operating Officer J. Kevin Buchi will join the Mesoblast Board of Directors, effective immediately.
(20min delay)