"Undisclosed royalties"

Perhaps the thing we want to know most, and also the first thing redacted from every publicly disclosed agreement.

Here is a very incomplete list of coy hints about royalty rates I noticed in publicly disclosed documents or press releases in the last year:

Parmion/Methlygene Agreement of January 31, 2006:
* mostly Phase I clinical trials for cancer indications
* North America: 13% to 21%
* ROW: 10% to 13%

Basilea/Johnson & Johnson of 3rd February 2005
* phase III
* “significant double-digit royalties on worldwide sales”

Theravance/GlaxoSmithKline

1. November 2002
* “The royalty structure would result in an average percentage royalty rate in the low to mid-teens at annual net sales up to approximately $4 billion, and the average royalty rate would decline to single digits at annual net sales of more than $6 billion.”

2. March, 2004
* “The royalty structure for a product containing one of our compounds as a single active ingredient would result in an average percentage royalty rate in the low double digits.”

Targacept/AstraZeneca of December 2005
* Phase II compound for improving cognitive deficits in Alzheimer’s Disease and Schizophrenia
* “stepped double digit royalties dependent on sales achieved”

New River/Shire of January 2005
* Phase III for ADHD
* US: divide US operating profit in accordance with the following general principles: Shire will retain 75% of profits for the first two years following launch and the parties will share the profits equally thereafter.
* ROW: low double-digit royalty

Avanir/AstraZeneca of July 11, 2005
* for cardiovascular disease
* "stepped royalties rising from single digit to low double digit rates"

Astex/AstraZeneca of July 27, 2005
* for use as anti-cancer agents.
* "up to double-digit royalties"

Pharmion/GPC
* Phase III for hormone-refractory prostate cancer
* "GPC Biotech will also receive royalties on sales of satraplatin in Pharmion's territories at rates of 26 to 30 percent on annual sales up to $500 million, and 34 percent on annual sales over $500 million"

Avanir/Novartis of April 28, 2005
* for orally active small molecule therapeutics targeting macrophage migration inhibitory factor (MIF) as potential treatments for inflammatory diseases
* "increasing royalties on worldwide product sales"

Anadys/Novartis of June 2, 2005
* Toll-Like Receptor 7 for chronic hepatitis C virus and hepatitis B virus
* "co-promotion option to retain 35 percent of profits...
* "royalties that will increase with increasing levels of sales of marketed products..."

Hybridon/Novartis of May 31, 2005
* immunomodulatory oligonucleotides that are toll-like receptor 9 agonists and that are identified as potential treatments for human allergy and respiratory diseases
* “The royalty rate on net sales of products in countries in which there is no coverage by licensed patent rights is less than the royalty rate on net sales of products in countries in which there is coverage by licensed patent rights. The applicable royalty rate is reduced if Novartis is required to pay license fees or royalties to any third party for licenses to specified categories of third party intellectual property rights necessary to develop, make, use or sell the product or if the ratio of Novartis’ cost of goods to net sales for a product exceeds a specified threshold. Novartis’ royalty and milestone obligations are also reduced if Novartis terminates the license, development and commercialization agreement based on an uncured material breach by the Company.”

Trimeris/Roche of 1999
* HIV fusion inhibitors
* US and Canada: equally share the profits and losses
* ROW: “appears that the rate is close to 10%”