Lundbeck buys remaining rights to desmoteplase from Paion

Danish CNS drug specialist Lundbeck A/S (LUND: DC) and Germany’s Paion AG (FSE: PA8) have entered into a definitive agreement under which Lundbeck acquires all of Paion's remaining rights to desmoteplase currently under clinical Phase III development for ischemic stroke.

The deal is an all-cash transaction valuing the assets at 20.1 million euros ($27.1 million). The acquisition is a logical next step in the development of desmoteplase, said Lundbeck. Under the terms of the transaction, Lundbeck will make an initial upfront payment of 18.6 million euros immediately upon and shortly after closing of the transaction.

The remainder of the purchase price will be held in escrow for one year. The transaction will be financed using currently available cash resources. Additional details of the financial terms of the agreement have not been disclosed, but Lundbeck is to pay single-digit royalties on sales as well as certain insignificant milestones to Bayer. The terms of the original deal in 2005, Paion received an upfront fee of 15.0 million euros and was eligible for additional milestone payments of up to 50.0 million euros.