Angiotech unit, Rex agree to terminate license and marketing deal

By Caroline Salls

Pittsburgh, Feb. 18 - Angiotech Pharmaceuticals, Inc.'s Angiotech Pharmaceuticals (US), Inc. subsidiary has executed a settlement and license termination agreement with Rex Medical, LP, according to a company news release.

Angiotech said the agreement calls for the full and final settlement and/or dismissal of all claims stemming from a March 2008 license, supply, marketing and distribution agreement with the subsidiary and Rex.

Under the 2008 agreement, Angiotech US marketed, sold and distributed the Option Inferior Vena Cava Filter on behalf of Rex.

As previously reported, the company announced in November that Angiotech notified Rex that it would not be commercially reasonable for the company to continue under the existing terms of the 2008 agreement in light of Angiotech's recent business changes and operating and liquidity conditions.

As a result, Rex launched arbitration proceedings on Nov. 18, alleging that Angiotech US wrongfully terminated the agreement.

Rex sought more than $3 million in monetary damages, as well as costs, fees and expenses related to the arbitration proceeding.

Rex also sought a preliminary injunction from the U.S. District Court for the Southern District of New York in aid of the arbitration.

On Dec. 2, the district court granted the injunction, prohibiting Angiotech US from ceasing performance under the agreement for 180 days or until the arbitration was finished.

Settlement terms

The specific terms of the settlement include:

• The termination of the agreement on March 31 or earlier at Rex's discretion. On the termination date, Angiotech US will no longer market, sell and distribute Option;

• Rex will be paid $1.5 million within five business days of the effective date of the settlement agreement, which will be the first business day after the Supreme Court of British Columbia approves the payment under Angiotech's Companies' Creditors Arrange Act proceedings;

The payment will represent final and full payment and settlement of all claims, all royalties due under the agreement related to sales of Option recorded by Angiotech US before Jan. 1 and all milestone payments due or that may come due to Rex under the agreement in the future; and

• Angiotech will deliver to Rex materials related to the marketing and sale of Option.

Angiotech, a Vancouver, B.C., specialty pharmaceutical and medical device company, filed for bankruptcy on Jan. 30 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 15 case number is 11-10269.

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