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Circassia settles LungFit dispute with Beyond Air
26th May 2021 12:14
(Sharecast News) - Respiratory diagnostics-focussed medical device company Circassia Group has signed an agreement to settle its contractual dispute with Beyond Air, it announced on Wednesday, around the licensing of the 'LungFit' product to Circassia by Beyond Air in January 2019.
The AIM-traded firm said that under the terms of the original agreement, it issued $10.5m (£7.43m) of Circassia shares to Beyond Air during the first half of 2019.
Under the terms of the settlement, Circassia said it would surrender its rights to the LungFit product in exchange for payments by Beyond Air, for up to a maximum of $16.5m, payable in cash instalments.
The first payment would be $2.5m, within 60 days of the approval of LungFit by the United States Food and Drug Administration (FDA).
A second $3.5m payment would be made within 60 days of the first anniversary of FDA approval, and a final $4.5m would fall due within 60 days of the second anniversary of FDA approval.
Circassia said it would also be entitled to a further royalty of 5% of net sales of LungFit, beginning on the second anniversary of FDA approval, and capped at a maximum of $6m.
"We are pleased to have been able to resolve this dispute without recourse to formal arbitration, with its associated long timescales and significant legal expense," said executive chairman Ian Johnson.
At 1505 BST, shares in Circassia Group were up 5.54% at 35.57p.
The AIM-traded firm said that under the terms of the original agreement, it issued $10.5m (£7.43m) of Circassia shares to Beyond Air during the first half of 2019.
Under the terms of the settlement, Circassia said it would surrender its rights to the LungFit product in exchange for payments by Beyond Air, for up to a maximum of $16.5m, payable in cash instalments.
The first payment would be $2.5m, within 60 days of the approval of LungFit by the United States Food and Drug Administration (FDA).
A second $3.5m payment would be made within 60 days of the first anniversary of FDA approval, and a final $4.5m would fall due within 60 days of the second anniversary of FDA approval.
Circassia said it would also be entitled to a further royalty of 5% of net sales of LungFit, beginning on the second anniversary of FDA approval, and capped at a maximum of $6m.
"We are pleased to have been able to resolve this dispute without recourse to formal arbitration, with its associated long timescales and significant legal expense," said executive chairman Ian Johnson.
At 1505 BST, shares in Circassia Group were up 5.54% at 35.57p.