Aclaris Therapeutics has divested RHOFADE® (oxymetazoline hydrochloride) cream, 1% and related intellectual property assets to EPI Health.
“This transaction provides us with an opportunity to refocus our resources on the development of our immuno-inflammatory assets so that we may develop treatments for patients with immuno-inflammatory diseases who lack satisfactory treatment options.” said Dr. Neal Walker, Aclaris’ President and Chief Executive Officer. “We also believe that EPI Health’s extensive dermatology and commercial expertise will be instrumental in their commercialization of RHOFADE."
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Aclaris and EPI Health have entered into a purchase agreement whereby Aclaris sold the worldwide rights to RHOFADE, which includes the assignment of certain licenses for related intellectual property assets. Pursuant to the terms of the agreement, EPI Health has agreed to pay Aclaris total cash consideration of up to $55.0 million, consisting of (i) an upfront payment of $35.0 million and (ii) potential sales milestone payments of up to $20.0 million in the aggregate upon the achievement of specified levels of net sales of products covered by the agreement. In addition, EPI Health has agreed to pay Aclaris, (i) a specified high single-digit royalty calculated as a percentage of net sales, on a product-by-product and country-by-country basis, subject to specified reductions, limitations and adjustments and (ii) 25% of any upfront, license, milestone, maintenance or fixed payment received by EPI Health from a licensee or sublicensee in any territory outside of the United States, subject to specified exceptions.
Concurrently with the closing of this transaction, Aclaris repaid in full its $30 million term loan (plus fees and expenses) with Oxford Finance. EPI Health has agreed to assume the obligation to pay specified royalties and milestone payments under Aclaris’ existing agreements with Allergan Sales, Aspect Pharmaceuticals, and Vicept Therapeutics.
As a result of these changes, Aclaris anticipates that its current cash, cash equivalents and marketable securities on hand, including the upfront proceeds received from EPI Health, and the repayment of the outstanding term loan, will be sufficient to fund its operations into the third quarter of 2021, without giving effect to any potential new business development transactions or financing activities.