Merck Sharp & Dohme, a big pharma company Entered into a license agreement with Tesaro under which Tesaro obtained exclusive, worldwide rights to certain patents and non-exclusive rights to certain Merck know-how, to research, develop, manufacture, market and sell niraparib and a backup compound, MK-2512, for all therapeutic and prophylactic uses in humans.
We are not currently advancing MK-2512.
Under the big pharma Merck's license, we are obligated to use diligent efforts to develop and commercialize a licensed product.
Under the terms of the license agreement, we are required to make an up-front payment to the big pharma giant Merck of $7 million in June 2012.
We are also required to make milestone payments to the big pharma company of up to $57 million in development and regulatory milestones for the first indication, up to $29.5 million in development and regulatory milestones for each successive indication, and up to $87.5 million in one-time sales milestones based on the achievement of annual sales objectives.
If commercial sales of niraparib commence, we will pay Merck tiered royalties at percentage rates in the low teens based on worldwide annual net sales.
The license with Merck will remain in effect until the expiration of the royalty term in such country, unless terminated earlier by the mutual agreement of the parties or due to the material breach or bankruptcy of a party.
In addition, beginning upon completion of the first Phase 2 clinical trial of a licensed product candidate, we may terminate the license without cause by giving 180 days written notice.
For further deal information visit Current Agreements (subscription required)
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