Business
Jaguar Health Eliminates Certain Royalty Obligations Reducing Future COGS for Mytesi and Crofelemer
SAN FRANCISCO, CA / ACCESSWIRE / October 4, 2019 / Jaguar Health, Inc. (NASDAQ:JAGX) ("Jaguar" or the "Company"), today announced that a License Termination
About this update from Jaguar Health, Inc.
[{"type":"text","content":"SAN FRANCISCO, CA / ACCESSWIRE / October 4, 2019 / Jaguar Health, Inc. (NASDAQ:JAGX) (\"Jaguar\" or the \"Company\"), today announced that a License Termination and Settlement agreement (\"LTSA\") related to SP-303, a component of Mytesi® (crofelemer), has been entered between Michael Tempesta, Ph.D. (\"Tempesta\"), Jaguar, and Jaguar's wholly-owned subsidiary, Napo Pharmaceuticals, Inc. (\"Napo\"), as well as their predecessors (collectively, \"Jaguar\"), regarding the license agreement Napo and Tempesta entered in 2002 (the \"2002 License\"). SP-303 is extracted and purified from the bark latex of the medicinal Croton lechleri tree in the Amazon rainforest.The termination was the result of Jaguar challenging the validity of the 2002 License, based on recent case law. Terminating the 2002 License caused royalty payments to Dr. Tempesta to cease as of September 30, 2018. Such royalty payments have been as high as 3% of net sales in the past and would have continued for as long as there were sales of Mytesi or crofelemer anywhere in the world. Cessation of the royalty payments reduces future cost of goods sold for Mytesi and crofelemer.\"We're very pleased to have entered into the LTSA,\" Lisa Conte, Jaguar's president and CEO commented. \"Jaguar entered into the LTSA with Dr. Tempesta to end the uncertainty as to the enforceability of the 2002 License and avoid potentially costly litigation. This reduction of COGS also enhances the value of our business development and potential licensing collaborations. As a result of the settlement, Dr. Tempesta will participate in future sales of Mytesi through the stock ownership that he received as a part of the consideration in the LTSA.\"Tempesta originally entered into a license agreement in 1990 (the \"1990 License\") with Shaman Pharmaceuticals (\"Shaman\") related to SP-303, and Napo is a successor-in-interest to Shaman. In 2002, Napo and Tempesta entered into a modified license agreement, the 2002 License, thereby terminating the 1990 License. Per the terms of the LTSA, the 2002 License, subject to specified provisions regarding an event of default, shall be deemed terminated as of September 30, 2018.Per the terms of the LTSA, Jaguar paid $50,000 to Tempesta and issued him an unsecured promissory note for the amount of $550,000 (the \"Note\"). The Note bears simple interest at 2 1/2%...