Payment Funded through Amended North American
License Agreement for AzaSite® Royalties
InSite Will Now Directly Receive Tiered Royalties from Sales of AzaSite;
Secured 16% Notes and Accrued Interest Liabilities Totaling $43.9 Cancelled
ALAMEDA, Calif. – June 12, 2014 – InSite Vision Incorporated (OTCBB: INSV) today announced that the Azithromycin PhaRMA Secured 16% Notes due 2019, issued by its wholly owned subsidiary, have been cancelled for a single payment of $6.0 million. The one-time payment to Noteholders was funded through an agreement to amend the North American license agreement for AzaSite® (azithromycin ophthalmic solution) 1%. Under the terms of the renegotiated license agreement, InSite received $6.0 million in return for a lower royalty on net sales of AzaSite in North America. Effective April 1, 2014, InSite Vision will receive a tiered royalty starting at 8%, with a maximum of 15%, from U.S. sales of AzaSite. The previous AzaSite royalty, which was paid to the Noteholders, was 25% of North American AzaSite net sales.
“We are pleased to have completely removed this debt from our balance sheet, and the return of AzaSite royalties directly to InSite’s income statement provides us with an ongoing source of revenue to support the development of our late-stage product candidates,” said Timothy Ruane, InSite Vision’s Chief Executive Officer. “Following three years of declining revenues, AzaSite was re-launched earlier this year, and we are excited about the future prospects for this product to address bacterial conjunctivitis in the U.S.”
In February 2008, InSite Vision (through its wholly-owned subsidiary) closed a private placement of $60 million in aggregate principal amount of non-convertible, non-recourse promissory notes issued by its subsidiary secured by royalties of AzaSite North American sales. As of the date of cancellation, the remaining principal amount of the notes was $41.3 million, together with accrued and unpaid interest of approximately $2.6 million, for a total of approximately $43.9 million of liabilities extinguished.
AzaSite contains the drug azithromycin and is formulated with InSite’s patented DuraSite® drugdelivery technology. AzaSite was launched in the U.S. in August 2007 by Inspire Pharmaceuticals, Inc. for the treatment of bacterial conjunctivitis and is now marketed by Akorn, Inc.
About InSite Vision
InSite Vision is advancing new ophthalmologic products for unmet eye care needs based on its innovative DuraSite® platform technologies. The DuraSite and DuraSite 2 drug delivery systems extend the duration of drug retention on the surface of the eye, thereby reducing the frequency of treatment and improving the efficacy of topical drugs.
The DuraSite platform is currently leveraged in two commercial products for the treatment of bacterial eye infections, AzaSite® (azithromycin ophthalmic solution) 1%, marketed in the U.S. by Akorn Pharmaceuticals; and Besivance® (besifloxacin ophthalmic suspension) 0.6%, marketed by Bausch + Lomb, a wholly owned subsidiary of Valeant Pharmaceuticals International. InSite Vision is also advancing two novel ophthalmic therapeutics through Phase 3 clinical studies: AzaSite Plus™ and DexaSite™ for the treatment of eye infections, and is preparing a new drug application (NDA) for the commercial approval by the U.S. Food & Drug Administration (FDA) of BromSite™ for the prevention of pain and inflammation associated with ocular surgery. For further information on InSite Vision, please visit www.insitevision.com.
# # # AzaSite® and DuraSite® are registered trademarks of InSite Vision Incorporated. AzaSite Plus™, BromSite™ and DexaSite™ are trademarks of InSite Vision Incorporated. BESIVANCE® is a registered trademark of Bausch + Lomb Incorporated.
Contact Information
InSite Vision
Louis Drapeau, Chief Financial Officer
510.747.1220
mail@insite.com
Media and Investor inquiries
BCC Partners
Michelle Corral
415.794.8662
Karen L. Bergman
650.575.1509
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