TaiMed Receives from Theratechnologies Notification of Returning Commercialization Rights for Trogarzo in European Territory
In March 2016, TaiMed and Theratechnologies Inc. signed a 12-year exclusive distribution and marketing agreement for the new AIDS drug Trogarzo in the United States and Canada (hereinafter referred to as North American Territory). The Agreement covers the intravenous injection of Trogarzo and new dosage forms developed in the future. In March 2017, TaiMed and Theratechnologies revised and amended the Agreement and added the exclusive rights to commercialize Trogarzo in Europe, including the European Union and its neighboring countries such as the United Kingdom, Israel, Norway, Russia and Switzerland (hereinafter referred to as the European Territory), totaling more than 30 countries.
The administration of Trogarzo by intravenous injection was approved by the European Medicines Agency (EMA) in September 2019, and was launched in Germany as the first country in Europe in September 2020. Later, Theratechnologies reached a public reimbursement agreement with the Italian Medicines Agency in the fourth quarter of 2021, and also successively negotiated the pricing and reimbursement with several other European countries.
Recent price negotiations with key European countries were not satisfactory to Theratechnologies and the proposed reimbursed prices fall well below the floor price set by TaiMed, making it unfeasible to continue selling the drug in those countries. (Note: TaiMed, per the license agreement, has the right to set a floor price to ensure a reasonable profit after its manufacturing and supply chain costs are covered.) Accordingly, Theratechnologies has sent a notice of termination to TaiMed that they will cease commercialization of Trogarzo in Europe 180 days from April 27, 2022 and will return to TaiMed the European commercialization rights. During this period, both parties will work together to ensure a smooth transition in accordance with the license agreement and relevant laws and regulations.
TaiMed is determined to continue to market Trogarzo and provide the drug to MDR AIDS patients who need it and has already begun searching for a new commercial partner for the European region through both internal and external efforts. It will be announced by a company press release once the partner has been confirmed. At present, since the sales of Trogarzo in the European market have just started, the net sales account for less than 10% of the sales in the US market and has little impact on the company financials. Theratechnologies continues to have the exclusive rights to commercialize Trogarzo in North American Territory.
According to the exclusive marketing agreement in European Territory, TaiMed received an initial upfront payment of 906,077 Theratechnologies’ common shares equivalent to US$3 million and an European launch milestone payment of US$5 million in cash. Those payments are non-refundable.