On the evening of the 28th, Microbio Pharmaceutical announced that its subsidiary, Microbio Shanghai Biotechnology Co., Ltd., had confirmed the receipt of the first payment of $20.4 million USD (approximately NT$650 million) from China Resources Double-Crane Pharmaceutical Co., Ltd. This payment is for the licensing of the new drug, FESPIXON® Cream, as per the agreement between the companies. According to IFRS 15 "Revenue from Contracts with Customers," this initial payment will be recorded as a contract liability and recognized as operating income over the licensing period.
Microbio Pharmaceutical explained that on July 19th of this year, Microbio Shanghai and Oneness Biotech jointly signed an exclusive "Commercialization Cooperation License Agreement" with China Resources Double-Crane for the mainland China market. Under this agreement, China Resources Double-Crane has the exclusive rights to sell and promote FESPIXON® Cream within the authorized region. On the 28th, China Resources Double-Crane made the first licensing payment of $20.4 million USD (RMB 150 million, including 6% VAT) to Microbio Shanghai.
FESPIXON®, a new drug developed by Microbio Shanghai and Oneness Biotech for diabetic foot ulcers, was licensed to China Resources Double-Crane Pharmaceutical on July 21st. The two companies signed a long-term contract spanning 20 years, granting China Resources Double-Crane exclusive sales rights for FESPIXON® in the mainland China market. According to the agreement, China Resources Double-Crane will initially pay Microbio Shanghai a signing bonus of up to $34 million USD (approximately NT$1.12 billion), of which about $6.8 million USD will be contingent on the outcome of the medical insurance approval.
Additionally, for every RMB 1 billion (approximately NT$4.5 billion) in new sales revenue generated, China Resources Double-Crane will make milestone payments of approximately $13.6 million USD (about NT$446 million) to the Microbio Group, continuing until 2043.
The development of FESPIXON® by Oneness Biotech took 15 years, and in November 2023, it received drug approval in mainland China, making it the first Class 1.1 natural drug and the first specialized new drug for diabetic foot ulcers in the country. Oneness Biotech submitted an application on July 12th of this year to the National Healthcare Security Administration of China to include FESPIXON® Cream in the national medical insurance program, with the goal of obtaining approval by the end of November and commencing sales at medical insurance prices throughout China starting in January of next year. Furthermore, FESPIXON® is currently undergoing clearance inspection in Beijing and is expected to be available for out-of-pocket sales as early as August.
Microbio Shanghai, a subsidiary in which Microbio Pharmaceutical holds a 58.32% direct and indirect stake, is also 31.5% owned by Oneness Biotech. Regarding production and profit-sharing, Oneness Biotech will supply FESPIXON® from its Nanzhou plant to Microbio Shanghai as per the contract, securing reasonable production and sales profits through this arrangement.
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