PharmaPrint Inks $43.5 Million Licensing Deal

IRVINE, CA—In a deal valued at more than $43.5 million, herbal medicine developer PharmaPrint (PPRT) has licensed its technology to mainstream health care products giant American Home Products (AHP) to develop herbal products for AHP’s Centrum and other consumer brands.

According to the agreement, American will pay PharmaPrint $3.5 million in license and development fees. AHP also will pay PPRT up-front development and marketing fees estimated at about $40 million. PPRT will receive royalties of 4% the first year and 6% per year thereafter.

PharmaPrint says it expects up to 23% in gross margins on products supplied to AHP under the exclusive manufacturing agreement. Products will be developed through AHP’s Whitehall-Robins Healthcare division, which makes Advil, Robitussin and Centrum.

The agreement allows both companies entry into the U.S. $3 billion OTC herbal remedies market created by passage of the Dietary Supplement and Health Education Act (DSHEA). PPRT will use the $3.5 million it receives from American to concentrate on developing clinically tested and FDA-reviewed pharmaceuticals derived from herbal medicines, James Burgess, PPRT director of investor relations, says.

PPRT’s saw palmetto berry-based drug—which treats benign prostate enlargement—currently is in Phase II clinical trials, and the company expects to file an Investigational New Drug (IND) application with the FDA in December for its St. John’s wort depression-treatment drug.

PharmaPrint has no products on the market to date but may have by sometime next year. The company’s process technology was developed by researchers at the University of Southern California Medical School, which still owns an interest in the company.

Both American and PharmaPrint had been shopping for mutually beneficial partnerships, according to Burgess.

“We have been out seeing quite a few large pharmaceutical companies, and they have been coming to see us,” he says.