Arrowhead Research Corporation (NASDAQ: ARWR) today announced that its wholly owned subsidiary, Tego Biosciences, has completed a definitive asset purchase agreement for the sale of its non-cash intellectual property (IP) to Luna Innovations, Inc. (Nasdaq: LUNA), a developer and manufacturer of new-generation products that include pharmaceutical nanomedicines.
Under the terms of the agreement, Luna paid Tego $430,000 upfront, will make milestone payments totaling $4.25 million for each fullerene product it brings to market under Tego IP, and pay royalties on net sales of its products built with the Tego IP.
Also under the terms of the agreement, Tego will receive payments of 10% on revenues from the licensing or resale of Tego’s IP and 50% of net proceeds from The Bronx Project products developed using Tego IP. The Tego IP includes a broad portfolio of foreign and domestic patents and patent applications relating to modified fullerenes for use in diagnostics, therapeutic, imaging and other biopharmaceutical-related applications.
“This agreement is in line with Tego’s plan to limit ongoing costs while retaining the ability to capture potential upside from its broad patent portfolio,” said Arrowhead’s President and CEO Dr. Christopher Anzalone. “Tego IP came into Arrowhead via the Carbon Nanotechnologies, Inc. acquisition, and we decided some time ago that it did not make sense for us to build the expertise necessary to develop fullerene-based healthcare products. We also recognized that there was a lot of potential value locked up in the Tego patent portfolio, so we sought to unlock that value with the right partner. As a company and through some of its senior scientists, Luna brings a strong knowledge base of fullerene derivatives. We believe that their focused effort to develop fullerene-based products has the potential to bear fruit, particularly now that it has access to the Tego patent portfolio. We view this as a potentially significant value-driver for Arrowhead in the long term because the Tego patent portfolio is not just applicable to a single product. Rather, it may be used for a suite of multiple products, each of which could bring value to Arrowhead via milestone payments and royalties.”
Arrowhead Research Corporation (NASDAQ: ARWR) is a nanotechnology company commercializing new technologies in the areas of life sciences, electronics, and energy. Arrowhead is seeking to build value for shareholders through the progress of majority-owned subsidiaries and minority investments commercializing nanotech products and applications.