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The $1m Deal Is Real - Eden Research (EDE)
5/1/2010
(119264)
The $1m Dream Is Real
Nice work if you can get it. Eden Research has landed a potentially highly lucrative deal with Teva Pharmaceutical, the Israeli company which is among the world’s top 20 pharmaceutical companies.
The headline figure could drop $1.05m in Eden’s lap for a development option and license agreement covering all veterinary health applications using Eden’s encapsulation technology and terpene formulations in the North Atlantic Free Trade Area. That is great going for something outside Eden’s main portfolio and which Eden had decided not to develop itself.
Inevitably, the $1m does not arrive in one chunk. There is some upfront payment due right away. There is a further payment when (and if) Teva takes up the option, then a more significant milestone payment linked to the value of sales. Eden is capitalised at £13m.
The deal has been in the works for quite some time, and Teva has done a great deal of work evaluating prospects, with help from Eden’s encapsulation expert Dr Gary Ostroff. It could take another year or so to develop specific formulations of products to treat common bacterial, fungal and/or parasitic pathogens for sale in NAFTA, and Teva will have first right to negotiate an exclusive licence for the rest of the world.
Given the way these things work, it might take until well into 2011 for any products to be ready for market, so this is no great instant cash boost. But every little helps, and all being well, this could be a highly lucrative deal with valuable royalties for years ahead, all from something outside Eden’s main agro-chem area.
Several other terpene possibilities outside agro-chem are under discussion with different companies, and the Teva deal adds further endorsement to the potential commercial value of Eden’s encapsulation and terpene technology.
There are hopes that the next stage of regulatory approvals for the mainstream terpene formulations will soon be resolved at long last. This ought to clear the way for licensees to start registration and move to selling in their own countries – always provided there is no hidden barrier in the never-ending regulation which has slowed Eden for so long.
If all goes to plan – though the company is confident, there are no guarantees – the removal of this obstacle might allow the share price to gain further ground. It edged up 1p to 20p to 23p today as 123,206 shares traded,
I have a holding in Eden Research.
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