KemPharm Inc. (NASDAQ: KMPH) shares made a handy gain on Wednesday after the firm announced a new license agreement with KVK Tech for the U.S. commercial rights of its FDA-approved prodrug product, Apadaz (benzhydrocodone and acetaminophen tablets).
Under the terms of the agreement, KemPharm is eligible to receive up to an estimated $3.4 million in prelaunch payments and certain cost reimbursements, including a $2.0 million payment upon achievement of a specified milestone related to the initial formulary adoption of Apadaz, as well as an aggregate of up to $53 million in milestone payments tied to specific net sales levels.
Additionally, net profits will be shared between KemPharm and KVK up to 50% based on achieving specified net sales levels.
KVK has the exclusive right for all commercial, manufacturing, packaging and distribution activities for Apadaz in the United States and will be responsible for all regulatory and commercialization-related expenses.
Prelaunch activities that KemPharm and KVK will continue to collaborate on include outreach and plan adoption by pharmacy benefit managers and managed care organizations for the exclusive utilization of Apadaz as an alternative to currently available hydrocodone/acetaminophen products.
Travis C. Mickle, Ph.D., president and CEO of KemPharm, commented:
Securing this agreement with KVK is an important step forward toward the commercial launch of APADAZ, a product which we believe offers a differentiated treatment option for the short-term management of acute pain. We believe Apadaz is now well-positioned for commercial launch since this agreement puts significant manufacturing and distribution capabilities in place and opens the door to further discussions with payers regarding the utilization of APADAZ in their health plans.
Shares of KemPharm were last seen up about 2.5% at $2.24, in a 52-week range of $2.00 to $8.40. The consensus analyst price target is $11.33.