NEW YORK (AFX) - Australian biotechnology company Progen Industries Ltd. said Tuesday it ended its partnership with Medigen Biotechnology Corp. over the company's anticancer drug PI-88.
The move ends a 15 percent royalty obligation from Progen to Medigen, a Taiwanese company, PI-88 is expected to move into Phase III clinical trials by the middle of 2007.
Progen is returning its 19.9 percent stake in Medigen and will issue 500,000 shares of its stock to Medigen. Also, Progen will pay Medigen about $300,000 when the agreement is executed. Another $2 million in cash or shares along with 732,000 shares of stock will be paid if Medigen completes two clinical milestones in a current PI-88 program.
Also, Progen will pay Medigen about $4 million if PI-88 achieves certain milestones and it will give 1 million options to Medigen upon providing a final Phase II clinical trial report.
Shares of Progen rose 7.6 cents to $4.8 on the Nasdaq Stock Market in midday trading.
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