In January 2007, Palatin entered into an exclusive global licensing and research collaboration agreement with AstraZeneca to discover, develop and commercialize compounds that target melanocortin receptors for treatment of obesity, diabetes and related metabolic syndrome. In June and December 2008 and in September 2009, the research collaboration and license agreement was amended to include additional compounds and associated intellectual property we developed and to modify royalty rates and milestone payments. Active work under the collaboration portion of the agreement concluded in January 2010.
AstraZeneca is developing collaboration compounds for the treatment of obesity. Development of one product under the AstraZeneca collaboration, AZD2820, has been discontinued following a serious adverse event in a Phase 1 trial. It could not be confirmed or excluded that the serious adverse event was linked to AZD2820. AstraZeneca remains committed to the collaboration program and to the continued advancement of melanocortin agonists for treatment of obesity.
Palatin has received up-front payments of $10 million and milestone and other payments of $12 million. Palatin is eligible for future milestone payments totaling up to $145 million, with up to $85 million contingent upon development and regulatory milestones and the balance on achievement of sales targets, plus mid to high single-digit royalties on sales of approved products.