Merck subsidiary Inspire Pharmaceuticals has agreed to amend the payment terms of its AzaSite (azithromycin ophthalmic solution) 1% license agreement with InSite Vision.
On a quarterly basis, Merck will pay InSite a higher annual minimum royalty or the earned royalty for 2012 and 2013, as well as a catch-up payment for the difference between earned royalties paid for 4Q11, the first and second quarters of 2012, and the annual minimum royalties for those quarters.
The minimum royalties due to InSite in 2012 total $17 million. InSite expects to receive minimum royalties of $4.25 million for 4Q12. Merck will pay InSite a catch-up payment of about $7.2 million before August 15, 2012. Minimum royalties for 2013 are $19 million.
“We applaud Merck’s willingness to amend our license agreement, and we thank them for their ongoing commitment to the commercial success of AzaSite in North America,” said Timothy Ruane, InSite’s chief executive officer. “With this quarterly restructuring of the minimum royalty obligation, InSite Vision will be able to meet its quarterly obligations to its Note Holders through Q3 2013, and thus continue to collaborate with Merck in their ongoing efforts to bring AzaSite to the patients who seek relief from bacterial conjunctivitis.”
In 2007, InSite Vision and Inspire Pharmaceuticals (acquired by Merck in 2011) partnered for the commercialization of AzaSite in North America.