GW Announces Amendments to its Sativex Marketing Agreement
GW Announces Amendments to its Sativex Marketing Agreement
11 May 2005
GW and Bayer Healthcare AG announce certain amendments to their marketing agreement for Sativex in the UK and Canada. The amendments have been made in light of the recent regulatory approval of Sativex in Canada, and reflect the fact that approval was granted in Canada before the UK, and not vice versa as was envisaged at the time that the marketing agreement was entered into in May 2003.
GW and Bayer Healthcare AG announce certain amendments to their marketing agreement for Sativex in the UK and Canada. The amendments have been made in light of the recent regulatory approval of Sativex in Canada, and reflect the fact that approval was granted in Canada before the UK, and not vice versa as was envisaged at the time that the marketing agreement was entered into in May 2003.
Under the original terms of the marketing agreement, as a consequence of the approval of Sativex in Canada last month, Bayer became obliged to make a milestone payment to GW. Bayer has now agreed to make an immediate additional payment to GW of £1m in further recognition of this approval.
With respect to the UK, the original terms provided, upon regulatory approval, for Bayer to be able to elect to utilise £10m of the total payment to subscribe for GW shares. Under the amended terms, the total payment to be received by GW on UK approval shall be £10m and this entire amount shall be paid in the form of a milestone payment (i.e. Bayer shall no longer be entitled to utilise any part of the payment to subscribe for GW shares). In addition, further milestones shall be payable to GW during the first three years following launch dependent on sales performance.
The total milestone payments due to GW under the Bayer agreement of £32.75m remain unchanged.
In addition, GW and Bayer have agreed a revised timeframe for their discussions on extending Bayer’s rights to other countries. These discussions will take place during the second half of 2005.
Dr Geoffrey Guy, Executive Chairman of GW, said, “We believe that these amendments are a positive development for GW shareholders. While the total value of our potential receipts under the marketing agreement remain unchanged, we have increased our short term cash position by £1m, whilst at the same time ensuring that the substantial UK approval payment will not be dilutive to our shareholders. With the successful approval of Sativex in Canada as well as our continued close collaboration in the UK, the GW-Bayer partnership remains strong.”
Enquiries:
| GW Pharmaceuticals plc | 01980 557 000 |
| Justin Gover, Managing Director | |
| David Kirk, Finance Director | |
| Weber Shandwick Square Mile | 020 7067 0700 |
| Kevin Smith/Rachel Taylor | |
This news release may contain forward-looking statements that reflect the Company's current expectations regarding future events, including the clinical development and regulatory clearance of the Company's products. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including (inter alia), the success of the Company's research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, including with respect to Sativex and the Company's other products, the uncertainties related to the regulatory process, and the acceptance of Sativex and other products by consumers and medical professionals.