On January 17, 2018 Aeterna Zentaris Inc. (NASDAQ:AEZS) (TSX:AEZS) reported that it has, through a wholly-owned subsidiary, entered into a license and assignment agreement with a wholly-owned subsidiary of Strongbridge Biopharma plc (NASDAQ:SBBP) to carry out development, manufacturing, registration and commercialization of Macrilen (macimorelin) in the United States and Canada (Press release, AEterna Zentaris, JAN 17, 2018, View Source [SID1234523233]).

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"We are very excited to partner with Strongbridge on the commercialization of Macrilen (macimorelin) in the U.S. and Canada," said Michael Ward, Chief Executive Officer of Aeterna Zentaris. "We look forward to exploring the various alternatives to monetizing our rights to Macimorelin outside the United States and Canada."

Aeterna Zentaris will receive an upfront cash payment of US$24,000,000 from Strongbridge, and, for as long as Macrilen (macimorelin) is patent-protected, Aeterna Zentaris will be entitled to a 15% royalty on net sales up to US$75,000,000 and an 18% royalty on net sales above US$75,000,000. Following the end of patent protection in United States or Canada for Macrilen (macimorelin), Aeterna Zentaris will be entitled to a 5% royalty on net sales in that country. In addition, Aeterna Zentaris will also receive one-time payments from Strongbridge following the first achievement of the following commercial milestone events:

US$4,000,000 on achieving US$25,000,000 annual net sales,
US$10,000,000 on achieving US$50,000,000 annual net sales,
US$20,000,000 on achieving US$100,000,000 annual net sales,
US$40,000,000 on achieving US$200,000,000 annual net sales, and
US$100,000,000 on achieving US$500,000,000 annual net sales.
Upon approval by the U.S. Food and Drug Administration ("FDA") of a pediatric indication for Macrilen (macimorelin), Aeterna Zentaris will receive a one-time milestone payment of US$5,000,000 from Strongbridge.

Strongbridge will fund 70% of the costs of a worldwide pediatric development program to be run by Aeterna Zentaris with customary oversight from a joint steering committee. The joint steering committee will be comprised of four persons, two of whom will be appointed by each of Strongbridge and Aeterna Zentaris.

The decision to license Macrilen (macimorelin) in the U.S. and Canada was made following a detailed review process undertaken by a committee of independent directors of Aeterna Zentaris. The committee of independent directors of Aeterna Zentaris was advised by Stifel, Nicolaus & Company, Incorporated. Aeterna Zentaris is continuing to explore various alternatives to monetizing its rights to Macimorelin in other countries around the globe, including whether to find other license partners in these jurisdictions or to use its internal resources to commercialize Macimorelin in one or more of these countries.

The Agreement will be filed on SEDAR at www.sedar.com. The foregoing description of the terms of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement.

Macrilen (macimorelin) is an orally-active ghrelin agonist that stimulates the secretion of growth hormone. Macrilen (macimorelin) has been granted orphan drug designation by the FDA for the evaluation of growth hormone deficiency. On December 20, 2017, the FDA granted Aeterna Zentaris marketing approval for Macrilen (macimorelin) to be used in the diagnosis of patients with adult growth hormone deficiency ("AGHD").

AGHD reportedly affects approximately 60,000 adults across the U.S. and Canada. Growth hormone not only plays an important role in growth from childhood to adulthood, but also helps promote a hormonally-balanced health status. AGHD mostly results from damage to the pituitary gland. It is usually characterized by a reduction in bone mineral density, lean body mass, exercise capacity, and overall quality of life as well as an increase of cardiovascular risks.