Columbia Laboratories to Receive One-time Payment of $300K from Actavis for CRINONE US Manufacturing Rights
Columbia Laboratories (NASDAQ: CBRX) has entered into an agreement with Actavis (NYSE: ACT) ("Actavis") for early termination of the companies' current exclusive Supply Agreement for CRINONE® (progesterone gel). The exclusive Supply Agreement, which would have otherwise terminated in May 2015, provided for Columbia to receive a 10% mark-up on its cost of goods of all product sold to Actavis. With the termination of the Supply Agreement, Actavis will manufacture CRINONE in-house.
Under the terms of the agreement, Columbia will receive from Actavis a one-time fee of $300,000 to offset estimated lost production margin through the original term of the Supply Agreement. Actavis will purchase all remaining work-in-progress and finished CRINONE in Columbia's inventory. Columbia will continue to receive a royalty of at least 10% on Actavis' U.S. net sales of CRINONE under the terms of the companies' 2010 Purchase and Collaboration Agreement.
"Actavis has made a significant long-term investment in the CRINONE franchise including the scale up of new manufacturing capacity," said Frank Condella, Columbia's president and CEO. "Columbia will continue to benefit from these investments via royalties while simplifying our overall supply chain obligations."
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