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RACE Oncology Limited (ASX:RAC) has executed the service agreement with New York based Biosynergy partners LLC, in order to pursue licensing of Bisantrene and other deals for the agreement. The Biosynergy partners is owned by one of the previous directors of RACE, who will work on looking for the deals for drugs. The announcement for the Bisantrene agreement was made on November 1, 2018. Bisantrene is a chemotherapy drug; and more than 40 clinical studies have tested the drug.
Under this agreement, all the potential transactions including any sale, partnership, collaborative venture or arrangement of any sort, license partnership, whereby an interest in Bisantrene will be transferred to a third party have been covered. The agreement is mainly focused on licensing of Bisantrene to commercial partners.
Under the agreement terms, no retainers will be paid but transactions fees will be paid to Biosynergy with 6% of the total consideration of US$25 million and 3% of the total consideration of over US$25 million.Â
The agreement terms include a minimum transaction fees of 10% for the first US$6 million of the total consideration and a maximum transaction fee of US$5 million and total consideration of US$142 million for the latter equivalent.
Biosynergy will be reimbursed by the RAC for all the out of pocket expenses. All the agreements, licence, partnership executed with MD Anderson cancer research center and existing consulting agreement with Mr. Tom Lee will be excluded from under this agreement. The agreement can be terminated by either of the parties giving a notice of 10 days in written.
Under such conditions of termination, Biosynergy will continue to receive transaction fees on any transactions executed by RAC in the subsequent 12 months. Meanwhile, Dr. Cullity will continue with his service and responsibilities as a non-executive director of RAC during the term of the agreement.
The company is interested in exploring licensing deals where the partners will carry the cost of the proposed AML registration trial. These licensing deals will offload the development costs to another party.
Not many licensing deals have been made in this year among small cap biotechs and particularly in the cancer space. One such deal was made by Neuren pharma (ASX:NEU) with NASDAQ listed ACADIA pharma, and under the deal the focus was to develop and commercialize the Rett syndrome treatment, neurological disorder that primarily occurs in baby girls. Second deal was between Benitec (ASX:BLT) and Axovant sciences for oculopharyngeal muscular dystrophy drug.
The share prices of RAC after remaining in pressure from last so many sessions has finally shown a good upside in today's session. Share prices after opening traded at the levels of $0.19, up 81% on November 01, 2018.
Previous day closing was recorded at the levels of $0.105. From the previous day close to the intraday high posted, the scrip has reported a significant rise. RAC has recorded its 52-week high at the levels of $0.52 at the start of the year and the 52-week low to $0.089. RAC after posting day high at $0.25, ended the session at the levels of $0.19. Meanwhile, the group also responded to ASX price query.
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