King & Spalding advised biotech company Cancer Prevention Pharmaceuticals in a licensing deal with Mallinckrodt Pharmaceuticals, through its Sucampo AG subsidiary, wherein Mallinckrodt obtained exclusive North American commercialization rights to CPP’s lead drug candidate, CPP-1X/sul.
In April 2018, UK-based Mallinckrodt had exercised its option to the license agreement, and paid CPP $10 million to support the pivotal Phase 3 clinical trial of CPP-1X/sul in patients with the orphan disease familial adenomatous polyposis (FAP). FAP is a genetic disease that typically develops into colon cancer. Under the terms of the license agreement, Mallinckrodt paid CPP a $5 million license fee. In addition, following commercialization of the product, CPP and Mallinckrodt will share profits equally on all North American sales of the drug. CPP is also eligible to receive up to an aggregate of $185 million from Mallinckrodt, dependent upon achievement of other clinical development and sales milestones, subject to a reduction of up to $15 million related to amounts provided by the company in advance of entering into this agreement. Each party will be reimbursed for its R&D expenses from future product profits. CPP maintains all global rights to CPP-1X/sul outside North America.
In connection with the transaction, CPP signed a service agreement with Mallinckrodt to assist with completing the FAP Phase 3 pivotal trial and certain activities supporting the preparation, filing and review of the NDA in the United States. CPP expects to be compensated for the services with additional R&D payments of up to approximately $10 million.
The King & Spalding team on this deal was led by San Francisco partner Tom Duley and included partner Jonathan Talansky, counsel Stephen Abreu and Brian Meiners, as well as associates Katy Alexander and Amy Dippolito.