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QLT and Kinetek enter long-term agreement
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VANCOUVER, British Columbia — QLT Inc. (NASDAQ: QLTI) and Kinetek Pharmaceuticals, Inc. have entered into a long-term research, development and license agreement to develop compounds known as signal transduction inhibitors for the treatment of eye, immune system and kidney diseases.
The transaction consists of an initial equity investment by QLT of $7.2 million (CDN$11 million) or 3.14 million Kinetek common shares to support the research and development necessary to discover and validate two drug candidates for clinical evaluation. QLT also has the option to obtain up to three additional compounds through further equity investments of $3.3 million (CDN$5 million) per compound. QLT’s initial equity investment was supplemented by a concurrent investment of $3.6 million (CDN$5.5 million) by a number of Kinetek’s existing major shareholders.
Once a compound is ready for clinical trials, QLT has the right to an exclusive license for that compound in the fields of ocular, immune (excluding asthma) and renal disease in exchange for milestone payments and royalties paid to Kinetek based on cumulative product sales. At that time, QLT will take over the clinical development and commercialization of each product while Kinetek retains the right to exercise a co-development option for products developed outside of ophthalmology. Total potential milestone payments combined with the initial equity investment for all five compounds combined will not exceed $80.1 million (about CDN$120 million). The milestone payments are based on clinical trial progress, product approvals and sales volumes.
"Early research has shown integrin linked kinase (ILK), one of the potential targets, plays a role in diseases such as cancer, psoriasis and age-related macular degeneration. Clearly these are commercially attractive markets that fall within our areas of interest and expand our early stage pipeline beyond photodynamic therapy," said Dr. Julia Levy, president and chief executive officer of QLT.
Kinetek is a privately held Vancouver-based biopharmaceutical company focused on the discovery and development of selective signal transduction inhibitors in cancer and inflammatory diseases. QLT is a world leader in photodynamic therapy, a field of medicine using light-activated drugs in the treatment of disease.