Cardiome (CRME) Enters Debt Settlement w/ Merck (MRK); Will Pay $20M
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Cardiome Pharma Corp. (Nasdaq: CRME) today announced that the company has reached an agreement with Merck (NYSE: MRK) to settle its debt obligations stemming from the companies' collaboration and license agreement for vernakalant, signed in April 2009.
Under the terms of the settlement agreement, Cardiome will pay Merck $20 million on or before March 31, 2013, to settle its outstanding debt of $50 million owed to Merck. The payment will be made from Cardiome's existing cash balance, which totalled $53.6 million at the end of September 2012. Pursuant to the vernakalant collaboration and license agreement Merck had granted Cardiome an interest-bearing credit facility of up to $100 million, secured by a first priority security interest in the company's vernakalant patents throughout the world and all associated proceeds. The settlement between Cardiome and Merck will terminate the credit facility and, upon payment of the $20 million settlement amount, will release and discharge the collateral security taken in respect of the advances under the line of credit.
In September 2012, Merck informed Cardiome that Merck (through two of its subsidiaries) would return the global marketing and development rights for both the intravenous (IV) and oral formulations of vernakalant to Cardiome. Vernakalant IV is marketed under the brand name BRINAVESSTM. BRINAVESSTM has received approval in the European Union and certain other markets worldwide for the rapid conversion of recent onset atrial fibrillation (AF) to sinus rhythm in adults: for non-surgery patients with AF of seven days or less and for post-cardiac surgery patients with AF of three days or less. Vernakalant IV is not approved for use in the United States or Canada.
Under the terms of the settlement agreement, Cardiome will pay Merck $20 million on or before March 31, 2013, to settle its outstanding debt of $50 million owed to Merck. The payment will be made from Cardiome's existing cash balance, which totalled $53.6 million at the end of September 2012. Pursuant to the vernakalant collaboration and license agreement Merck had granted Cardiome an interest-bearing credit facility of up to $100 million, secured by a first priority security interest in the company's vernakalant patents throughout the world and all associated proceeds. The settlement between Cardiome and Merck will terminate the credit facility and, upon payment of the $20 million settlement amount, will release and discharge the collateral security taken in respect of the advances under the line of credit.
In September 2012, Merck informed Cardiome that Merck (through two of its subsidiaries) would return the global marketing and development rights for both the intravenous (IV) and oral formulations of vernakalant to Cardiome. Vernakalant IV is marketed under the brand name BRINAVESSTM. BRINAVESSTM has received approval in the European Union and certain other markets worldwide for the rapid conversion of recent onset atrial fibrillation (AF) to sinus rhythm in adults: for non-surgery patients with AF of seven days or less and for post-cardiac surgery patients with AF of three days or less. Vernakalant IV is not approved for use in the United States or Canada.
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