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AIT Enters into $32.5 million Commercial Licensing Agreement with Circassia Pharmaceuticals for Its Novel Nitric Oxide Generator and Delivery System for Use in the Hospital Setting in the United States and China
Additionally, AIT to garner a 15%-20% royalty on gross profit
AIT will immediately request to be listed on the NASDAQ stock exchange
PMA submission on track for the second quarter of 2019
Company to host a call today, Thursday, January 24, 2019 at 8:30am ET
GARDEN CITY, N.Y. and REHOVOT, Israel, Jan. 24, 2019 (GLOBE NEWSWIRE) -- AIT Therapeutics, Inc. (OTCQB: AITB), a clinical-stage medical device and biopharmaceutical company focused on developing inhaled Nitric Oxide (NO) for the treatment of patients with respiratory conditions including serious lung infections and pulmonary hypertension, today announced it has licensed the commercial rights for its novel cylinder free nitric oxide (NO) generator and phasic-flow delivery system (AirNOvent*) in the United States and China for use in the hospital setting at NO concentrations < 80 ppm to Circassia Pharmaceuticals plc.
“We are thrilled to complete this agreement with Circassia, a respiratory focused, specialty pharmaceutical company with estimated 2018 revenues of approximately $62 - $67 million. We look forward to working with a highly skilled Circassia team to bring this revolutionary product to market,” remarked Steve Lisi, Chairman and Chief Executive Officer of AIT. “Circassia is one of the very few companies in the United States with comprehensive knowledge of the specialty hospital market and nitric oxide by way of its NIOX® asthma management system. NIOX® is a nitric oxide measurement system for monitoring airway inflammation sold to specialists around the world.”
Impact on AIT
- AIT’s cash runway will be extended through the first quarter of 2020, exclusive of regulatory approval milestones
- The Company will immediately request to be listed on the NASDAQ stock exchange
- Enables AIT to increase its support infrastructure for a pivotal bronchiolitis study and a pilot nontuberculous mycobacteria (NTM) study in the U.S., both anticipated to commence prior to year-end 2019.
- Enhances the Company’s ability to find commercial partners in other key global markets
Key Deal Terms
- AIT grants Circassia an exclusive license for the commercialization of AIT’s nitric oxide generator and delivery system for the treatment of persistent pulmonary hypertension of the newborn (PPHN) and related indications at concentrations of < 80 ppm in the hospital setting in the United States and China
- AIT will receive payments in the form of either i) Circassia stock at a discount to a pre-determined trailing average or ii) in cash (at approximately a 4.75% discount to the figures shown below), based upon the achievement of certain milestones as follows:
- $7.35 million payable immediately
- $3.15 million payable upon successful completion of an FDA pre-submission meeting expected to take place in February 2019
- $12.60 million payable on the sooner of 90 days post FDA approval or US launch
- $8.40 million payable upon label expansion beyond PPHN in the US
- $1.05 million payable on product launch in China
- AIT will receive royalties based upon gross profit, defined as net sales less only payments to AIT for supply. After exceeding one-time gross profit thresholds in each country, recurring royalties range between 15% and 20% and break down as follows:
- A one-time 5% royalty on the first cumulative $50 million in gross profit in the US
- A one-time 5% royalty on first cumulative $20 million in gross profit in China
- A 15% royalty on first $100 million in annual gross profit (US & China combined)
- A 20% royalty for above $100 million in annual gross profit (US and China combined)
- Circassia shall pay AIT cost plus for generator systems as well as filters
- AIT will be responsible for development, manufacturing, regulatory (US only) and repairs
- Circassia will be responsible for all commercial sales and marketing functions including:
- Hiring and managing dedicated field-based teams including sales representatives, medical and clinical liaisons, along with other sales and marketing functions
- Managing all operations in support of a commercial launch including marketing, customer support, technical support, distribution, logistics etc.
“We, along with Circassia, anticipate entering the U.S. market in the first half of 2020, given FDA typically rules on PMA approvals 180 days post submission,” added Mr. Lisi. “Given the elimination of nitric oxide cylinders and all of the associated benefits, along with the expertise of Circassia, we anticipate gaining significant market share over the first few years after launch.”
Key Benefits Over Cylinder Based Systems
- AIT’s NO generator and delivery system will eliminate the need for high-pressure NO cylinders in the hospital setting, which can bring many tangible benefits, including:
- Reduced company or hospital liability associated with transportation and maintenance of high-pressure cylinders, which are classified as dangerous goods
- Decreased system set-up time and level of complexity
- A reduction in potential risk to the patient by removing exposure to inadvertent nitrogen dioxide (NO2) boluses by eliminating the need for NO2 purge procedures prior to starting or re-starting NO therapy
- Significantly decreased burden to hospital staff by eliminating cumbersome intra-hospital delivery and removal of NO cylinders
- Improved cart maneuverability due to the greatly reduced cart weight and size
- Option to remove system from the cart if needed
- Greatly improved inventory management with small NO2 filters compared to bulky, heavy cylinders
- Drastically improved storage requirements of NO2 filters compared to cylinders.
- No significant capital investment for hospitals that currently do not offer nitric oxide but would like to
Conference Call and Webcast
The Company will host a call today, Thursday, January 24, 2019 at 8:30am Eastern Time. Dial in information and details are as follows:
|Replays available through February 7, 2019|
Nitric oxide (NO) is a crucially important molecule proven to play a critical role in a broad array of biological functions. Inhaled nitric oxide is currently approved for treating term and near-term neonates with Persistent Pulmonary Hypertension of the Newborn (PPHN) in the United States of America and most major markets. In Europe, Japan and Australia, inhaled NO is approved to treat PPHN as well as pulmonary hypertension during the peri-operative cardiac surgery period in neonates, children, and adults. In the airways, NO is believed to play a key role in the innate immune system at concentrations of approximately 200 ppm. In vitro studies suggest that NO possesses anti-microbial activity not only against common bacteria, both gram-positive and gram-negative, but also against other diverse organisms including mycobacteria, fungi, yeast and parasites, and has the potential to eliminate their multi-drug resistant strains.
Persistent pulmonary hypertension of the newborn (PPHN) is a life-threatening condition secondary to failure of normal circulatory transition at birth. It is a syndrome characterized by elevated pulmonary vascular resistance (PVR) that causes labile hypoxemia due to decreased pulmonary blood flow and right-to-left shunting of blood. Its incidence has been reported as 1.9 per 1000 live births (0.4–6.8/1000 live births) with mortality rate ranging between 4–33%. This syndrome complicates the course of about 10% of infants with respiratory failure and remains a source of considerable morbidity and mortality. NO gas is a pulmonary vasodilator and is approved in dozens of countries to improve oxygenation and reduce the need for extracorporeal membrane oxygenation (ECMO) in term and near-term (>34 weeks gestation) neonates with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary hypertension in conjunction with ventilator support and other appropriate agents.
AIT’s ventilator compatible NO Generator and Delivery System is a cylinder free, phasic flow nitric oxide delivery system and has been designated as a medical device by the US Food and Drug Administration (FDA). The device can generate NO on demand for delivery to the lungs at concentrations ranging from 1 part per million (ppm) to 80 ppm. The elimination of the need for large, high-pressure cylinders for NO is a significant advantage in the hospital setting by greatly reducing inventory and storage requirements, and improving overall safety with the elimination of NO2 purging steps, among other benefits.
AIT Therapeutics Inc. is a clinical-stage medical device and biopharmaceutical company using nitric oxide (NO) to treat respiratory and other diseases. The Company is currently applying its therapeutic expertise to treat lower respiratory tract infections that are not effectively addressed with current standards of care, as well as pulmonary hypertension, in various settings. AIT Therapeutics is currently advancing its revolutionary NO Generator and Delivery System in clinical trials for the treatment of bronchiolitis and nontuberculous mycobacteria (NTM). For more information, visit www.AIT-Pharm.com.
Circassia is a world-class specialty pharmaceutical business focused on respiratory disease. Circassia sells its novel, market-leading NIOX® asthma management products directly to specialists in the United States, United Kingdom and Germany, and in a wide range of other countries through its network of partners. In 2017, the Company established a commercial collaboration with AstraZeneca in the United States in which it promotes the chronic obstructive pulmonary disease (COPD) treatment Tudorza® and has the commercial rights to NDA-stage COPD product Duaklir®. For more information please visit www.circassia.com.
Oppenheimer & Co. Inc. is serving as exclusive financial advisor to AIT on the transaction.
*AirNOvent is not an approved name for the product and may not be the final name submitted for approval
This press release contains “forward-looking statements.” Forward-looking statements include statements about our expectations, beliefs, or intentions regarding our product offerings, business, financial condition, results of operations, strategies or prospects. You can identify such forward-looking statements by the words “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “likely,” “goal,” “assumes,” “targets” and similar expressions and/or the use of future tense or conditional constructions (such as “will,” “may,” “could,” “should” and the like) and by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including risks related to: our approach to discover and develop novel drugs, which is unproven and may never lead to marketable products; our ability to fund and the results of further pre-clinical and clinical trials; obtaining, maintaining and protecting intellectual property utilized by our products; our ability to enforce our patents against infringers and to defend our patent portfolio against challenges from third parties; our ability to obtain additional funding to support our business activities; our dependence on third parties for development, manufacture, marketing, sales, and distribution of products; the successful development of our product candidates, all of which are in early stages of development; obtaining regulatory approval for products; competition from others using technology similar to ours and others developing products for similar uses; our dependence on collaborators; and our short operating history. We undertake no obligation to update, and we do not have a policy of updating or revising, these forward-looking statements, except as required by applicable law.
Steven Lisi, Chief Executive Officer
AIT Therapeutics, Inc.
LifeSci Advisors, LLC