Oculus (OCLS) Enters License, Supply and Shared Services Agreements with Ruthigen
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Oculus Innovative Sciences (Nasdaq: OCLS) announced that the company has entered into two key agreements, which establish the license and supply as well as shared services with its wholly owned subsidiary, Ruthigen, Inc., which is focused on the discovery, development, and commercialization of pharmaceutical-grade hypochlorous acid-based therapeutics. The company expects to negotiate and enter into a third agreement (Separation Agreement) governing other terms of their business relationship. The effective date for all three agreements would be the closing date of Ruthigen's proposed initial public offering, if any should occur.
Pursuant to the license and supply agreement, Oculus agreed to exclusively license certain of its proprietary technology to Ruthigen to enable Ruthigen's research and development and commercialization of the newly discovered RUT58-60, and any improvements to it, in the United States, Canada, European Union and Japan, referred to as the Territory, for certain invasive procedures in human treatment as defined in the license and supply agreement.
In addition, the license and supply agreement provides Ruthigen with the exclusive option, exercisable within the first five years following the effective date of the agreement, to expand the license to certain other therapeutic indications upon payment of a license expansion fee of $10 million within the first two years following the effective date of the agreement or, after the two-year period, the same fee plus certain out-of-pocket costs Oculus may incur in developing products for any of the indications. Additionally, Oculus will be prohibited from using the licensed proprietary technology to sell products that compete with Ruthigen's products within the Territory, and Ruthigen cannot sell any device or product that competes with Oculus products being sold or developed as of the effective date of the license and supply agreement.
Ruthigen will be required to make a total of $8,000,000 in payments to Oculus based upon the completion of certain development and other future milestones, and at the time of drug approval, if any should occur, supplemented with royalty payments, which will vary between three percent and 20 percent, increasing upon achievement of various net annual sales thresholds and dependent upon the country of sale.
Oculus and Ruthigen also entered into a shared services agreement that would take effect upon the completion of Ruthigen's proposed initial public offering, if any should occur, pursuant to which Oculus will provide Ruthigen with general services, including general accounting, human resources, laboratory personnel and shared R&D resources, while Ruthigen plans to establish an independent facility and systems. As a wholly owned subsidiary, Ruthigen will be financed by Oculus until the completion of the proposed initial public offering, if any should occur, and after such event, Ruthigen would become responsible for its own expenses.
Pursuant to the license and supply agreement, Oculus agreed to exclusively license certain of its proprietary technology to Ruthigen to enable Ruthigen's research and development and commercialization of the newly discovered RUT58-60, and any improvements to it, in the United States, Canada, European Union and Japan, referred to as the Territory, for certain invasive procedures in human treatment as defined in the license and supply agreement.
In addition, the license and supply agreement provides Ruthigen with the exclusive option, exercisable within the first five years following the effective date of the agreement, to expand the license to certain other therapeutic indications upon payment of a license expansion fee of $10 million within the first two years following the effective date of the agreement or, after the two-year period, the same fee plus certain out-of-pocket costs Oculus may incur in developing products for any of the indications. Additionally, Oculus will be prohibited from using the licensed proprietary technology to sell products that compete with Ruthigen's products within the Territory, and Ruthigen cannot sell any device or product that competes with Oculus products being sold or developed as of the effective date of the license and supply agreement.
Ruthigen will be required to make a total of $8,000,000 in payments to Oculus based upon the completion of certain development and other future milestones, and at the time of drug approval, if any should occur, supplemented with royalty payments, which will vary between three percent and 20 percent, increasing upon achievement of various net annual sales thresholds and dependent upon the country of sale.
Oculus and Ruthigen also entered into a shared services agreement that would take effect upon the completion of Ruthigen's proposed initial public offering, if any should occur, pursuant to which Oculus will provide Ruthigen with general services, including general accounting, human resources, laboratory personnel and shared R&D resources, while Ruthigen plans to establish an independent facility and systems. As a wholly owned subsidiary, Ruthigen will be financed by Oculus until the completion of the proposed initial public offering, if any should occur, and after such event, Ruthigen would become responsible for its own expenses.
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