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Subsequent Events
12 Months Ended
Dec. 31, 2014
Subsequent Events [Abstract]  
Subsequent Events

Note 11—   Subsequent Events

Resignation of Chief Financial Officer

On April 3, 2015, Dennis Mulroy resigned as the Chief Financial Officer of Taxus Cardium Pharmaceuticals Group Inc. and from all other offices with the Company. Mr. Mulroy resigned to pursue other opportunities and his departure was not due to any dispute or disagreement with the Company. He did not receive any severance payments under his employment agreement in connection with his departure.

 

Co-Development and Distribution Agreement with Dr. Reddy’s Laboratories Ltd.

On April 6, 2015, the Company entered into a term sheet with Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) covering the co-development, marketing and sales of the Generx® [Ad5FGF-4] angiogenic microvascular gene therapy Phase 3 product candidate for patients with refractory angina and myocardial ischemia due to cardiac microvascular insufficiency. The terms sheet outlines the principle agreements between the parties and is binding, but is expected to be superseded by a definitive agreement with more detailed terms.

The term sheet grants Dr. Reddy’s Laboratories an exclusive license to market and sell Generx® in Russia, the Commonwealth of Independent States (CIS), Venezuela, Vietnam and Myanmar (the “Licensed Territories”) for a period of ten years with two five-year renewal options. Dr. Reddy’s Laboratories’ Russian-based business unit currently markets and sells prescription products in Russia. The term sheet grants Dr. Reddy’s Laboratories a right of first negotiation for the license rights to market and sell Generx® in up to 32 other countries in Latin America and the Association of Southeast Asian Nations. The Company retains full commercialization rights for North America, Europe, Japan, China, the Middle East, and Africa.

As co-development partner, Dr. Reddy’s Laboratories will assist with physician and hospital relationships as well as patient recruitment to accelerate completion of international Phase 3 ASPIRE clinical study in Russia. Dr. Reddy’s Laboratories’ Russian-based business unit markets and sells prescription products through its team of medical representatives and managers who promote the products to physicians across Russia. It has also agreed to assist with product registrations and regulatory compliance with local country health authorities in other jurisdictions in the Licensed Territories. Upon registration of Generx® in Russia, Taxus Cardium and Dr. Reddy’s Laboratories have agreed to share costs for a planned Phase 4 post-marketing clinical study, intended to expand the medical indications for which the product can be used.

The term sheet provides for Dr. Reddy’s Laboratories to pay upfront licensing fees on execution of the definitive agreement and upon registration of the Generx® product in Russia. The Company will retain control over the manufacturing of Generx® and will supply it to Dr. Reddy’s Laboratories on a cost-plus basis. Dr. Reddy’s will pay royalties on net sales of Generx®, with the percentage varying based on the degree of market penetration for the product in the relevant territory.

Formation of Angionetics Inc.

In April 2015, the Company formed a new subsidiary Angionetics Inc., a Delaware corporation, for the purpose of continuing the work of the Company’s cardium therapeutics business. Angionetics Inc. is focused on the Phase 3 clinical development and commercialization of Generex®, the Company’s angiogenic gene therapy product candidate for the treatment of refractory angina and myocardial ischemia due to cardiac microvascular insufficiency.

Angionetics Financing Agreement

On April 8, 2015, the Company entered into a binding term sheet with Shenzhen Qianhai Taxus Industry Capital Management Co., Ltd (“Shenzhen Qianhai Taxus”), as lead investor, to purchase an equity stake in Angionetics Inc.

Under the terms of the agreement, Shenzhen Qianhai Taxus agreed to acquire 15% of Angionetic’s outstanding common stock for an aggregate purchase price of $3,000,000 or 600,000 shares at $5 per share, payable in three tranches that are planned to be completed by May 30, 2015. On completion of the purchase, the Company has agreed to grant Shenzhen Qianhai Taxus a right of first negotiation for exclusive license agreements for certain Asian markets to register, market and sell the Generx® product candidate, Excellagen®, and LifeAgain®.

The agreement contemplates that this initial funding is a bridge investment to a separate larger financing to be conducted by Angionetics, Inc., including a potential registration and public offering of securities. The terms provide for the Company to gross up Shenzhen Qianhai Taxus’ shares to equate to a 15% interest in Angionetics, Inc. following any such public offering. It also provides for certain registration rights for the shares purchased by Shenzhen Qianhai Taxus.

Shenzhen Qianhai Taxus is an affiliate of Shanxi Taxus Pharmaceuticals Co., Ltd. which holds approximately 27.5% of Cardium’s outstanding common stock as a result of a Stock Purchase Agreement dated February 21, 2014. In connection with that transaction, the Company granted Shanxi Taxus Pharmaceuticals Co., Ltd. the right to appoint two members to our Board of Directors. Mr. Jiayue Jhang, one of the appointed members of our Board of Directors who serves as our Chairman, is the Chairman of Shenzhen Qianhai Taxus and Shanxi Taxus Pharmaceuticals Co., Ltd.