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Subsequent Event (Notes)
9 Months Ended
Sep. 30, 2013
Subsequent Events [Abstract]  
Subsequent Event
Subsequent Event
On November 1, 2013, the Company entered into a Development and Option Agreement (the Development Agreement) with Altus Formulation Inc. (Altus). Under the Development Agreement, Altus will be responsible for the development of abuse deterrent formulations of hydrocodone using Altus’ Intellitab™ drug delivery platform and will be reimbursed by the Company for its development efforts on the product. The Company is responsible for the conduct of the clinical development of the product and will pay a non-refundable upfront fee to Altus of $750,000. The Company is also obligated to pay Altus up to $3,500,000 in total future milestone payments upon the achievement of various development and regulatory milestones.
Pursuant to the Development Agreement, the Company was granted an option to obtain an exclusive, royalty-bearing license, with the right to sublicense, to certain Altus intellectual property rights to make, have made, import, use, sell, have sold, offer for sale and import an abuse deterrent formulation of hydrocodone for the treatment or relief of pain in the United States. However, the Company will need to obtain the consent of Alkermes or otherwise amend its license agreement with Alkermes for Zohydro ER in order to exercise the option and ultimately commercialize the Altus abuse deterrent formulation of hydrocodone. If the Company exercises this option, Altus will be eligible to receive additional regulatory and sales milestones and a royalty based on net sales of the licensed product.
The term of the Development Agreement will end upon expiration of the earlier of (1) the date upon which a NDA or similar application for regulatory approval is submitted by the Company for the Altus abuse resistant formulation of hydrocodone, or (2) November 1, 2016. The Company may terminate the Development Agreement upon 30 days’ written notice or upon written notice of a material uncured breach by Altus. In addition, the Company may terminate any work plan under the Development Agreement upon written notice. Altus may only terminate the Development Agreement upon the occurrence of certain bankruptcy events with respect to the Company. Altus may also terminate a work plan under the Development Agreement upon written notice of the Company’s material uncured breach.