Quarterly report pursuant to Section 13 or 15(d)

Note 12 - License and Collaboration Agreement With Related Party

v3.19.1
Note 12 - License and Collaboration Agreement With Related Party
3 Months Ended
Mar. 31, 2019
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]
12.
License and Collaboration Agreement with Related Party
 
On
September 27, 2018,
the Company entered into a license and collaboration agreement (the “License Agreement”) with Ahon Pharmaceutical Co Ltd. (“Ahon Pharma”), which grants Ahon Pharma exclusive rights to develop and commercialize
DM199
for acute ischemic stroke in mainland China, Taiwan, Hong Kong S.A.R. and Macau S.A.R. Under the terms of the agreement, the Company received a non-refundable upfront payment of
$500,000
upon signing the License Agreement and is entitled to receive an additional non-refundable payment of
$4.5
million upon the earlier of regulatory clearance to initiate a clinical trial in China or
July 1, 2019.
The Company also has the potential to receive up to an additional
$27.5
million in development and sales related milestones and up to approximately
10%
royalties on net sales of
DM199
in the licensed territories. All development, regulatory, sales, marketing, and commercial activities and associated costs in the licensed territories will be the sole responsibility of Ahon Pharma. The License Agreement
may
be terminated at any time by Ahon Pharma by providing
120
days written notice.
 
Ahon Pharma is a subsidiary of Shanghai Fosun Pharmaceutical (Group) co. Ltd. (“Fosun Pharma”) which, through its partnership with SK Group, a South Korea based company, is an investor in DiaMedica, holding approximately
8.4%
of our common shares as of
December 31, 2018.
This investment was made in
2016.