InSite Vision, a company advancing ophthalmologic products to address unmet eye care needs, today announced that Merck & Co. Inc., via subsidiary Inspire Pharmaceuticals Inc., has agreed to amend the payment terms of the companies' AzaSite® 1% license agreement, payable on a quarterly basis.
Per the agreement, Merck will pay InSite the higher of the pro-rata annual minimum royalty or the earned royalty for 2012 and 2013; the minimum royalties due to InSite for 2012 total $12 million. Minimum royalties for 2013 are $19 million, or $4.75 million per quarter.
Merck also will pay InSite a catch-up payment of about $7.2 million for the difference between the earned royalty already paid for the fourth quarter of 2011 and the first and second quarters of 2012, and the pro-rata annual minimum royalties for those quarters. InSite expects to receive minimum royalties of $4.25 million for the fourth quarter of 2012.
InSite said it will use the royalty payments received in August to pay all current and deferred interest on its AzaSite secured notes and to make a principal payment on the notes of about $4.9 million.
"We applaud Merck's willingness to amend our license agreement, and we thank them for their ongoing commitment to the commercial success of AzaSite in North America," Timothy Ruane, InSite's CEO stated in the press release. "With this quarterly restructuring of the minimum royalty obligation, InSite Vision will be able to meet its quarterly obligations to its Note Holders through Q3 2013, and thus continue to collaborate with Merck in their ongoing efforts to bring AzaSite to the patients who seek relief from bacterial conjunctivitis."
In 2007, InSite entered into an agreement with Inspire Pharmaceuticals (which was acquired by Merck in May 2011) to commercialize AzaSite in North America. Per that agreement, InSite is eligible to receive payments of 25 percent on net sales, as well as minimum royalty payments that increase yearly through 2013.
For more information visit insitevision.com
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