QLT Inc. recently completed the sale of its punctal plug drug delivery system (PPDS) technology to Mati Therapeutics Inc. Mati was founded by Robert Butchofsky, an ex-president and chief executive officer of QLT .
We remind investors that on Dec 24, 2012, QLT inked an exclusive option deal with Mati. As per the terms of the deal, Mati was granted a 90-day option by QLT to buy the assets related to its PPDS technology for $0.5 million.
Mati exercised the option on Apr 3, 2013 and both the companies inked an asset purchase agreement to accomplish the technology sale. Following the closure of the transaction, QLT received a further $0.75 million from Mati. QLT is eligible to receive milestone payments up to $19.5 million under the deal. The amount will be exceeded in the event of more than 2 drugs hitting the market.
Apart from the milestone payments, QLT is eligible to receive royalties (low single digit) on global sales of all the drugs developed with the aid of the PPDS technology. Moreover, Mati will pay a fee to QLT on non sales related payments received by the former pertaining to the technology. Consequently, the deal is expected to boost Canada-based QLT’s balance sheet significantly.
QLT, which focuses on developing and commercializing innovative ocular products for those with high unmet medical needs, carries a Zacks Rank #1 (Strong Buy). Other Zacks #1 Ranked stocks include Cytokinetics, Incorporated (CYTK - Free Report) , Biogen Idec Inc. (BIIB - Free Report) and Athersys, Inc. (ATHX - Free Report) .