Annual report pursuant to Section 13 and 15(d)

Subsequent Events

Subsequent Events
12 Months Ended
Dec. 31, 2014
Subsequent Events [Abstract]  
Subsequent Events
18. Subsequent Events
On January 14, 2015, a wholly owned subsidiary of the Company, Coronado SO Company (“Coronado SO”), entered into an exclusive license agreement with a third party for a license for a Phase 2, topical product used in the treatment of Hand-Foot Syndrome, a common painful side effect of chemotherapeutics. Coronado SO paid $0.9 million upfront and will pay $0.9 million nine months from the execution date. Additional milestone payments are due upon the achievement of certain development milestones and royalties will become due on sales of the product.
On February 18, 2015, the Company purchased an exclusive license to an intravenous (“IV”) formulation of Tramadol for the U.S. market from Revogenex Ireland Ltd (“Revogenex”), a privately held company in Dublin, Ireland. The Company made an upfront payment of $2.0 million to Revogenex upon execution of the exclusive license and Revogenex is eligible to receive additional milestone payments upon the achievement of certain development milestones, in addition to royalty payments for sales of the product. Tramadol is a centrally acting synthetic opioid analgesic for moderate to moderately severe pain and is available as immediate release or extended-release tablets in the United States.
Also, in February 2015, the Company has formed a wholly owned subsidiary, Avenue Therapeutics, Inc., to acquire, in-license, develop and commercialize products principally for use in the U.S. hospital market. The Company will transfer the Revogenex license to Avenue Therapeutics, Inc. Avenue Therapeutics plans to initiate a Phase III development program of IV Tramadol for the management of post-operative pain later this year. Under the terms of the agreement, the Company and Avenue Therapeutics will assume sole responsibility for the development and commercialization of IV Tramadol in the United States. In addition to IV Tramadol, Avenue Therapeutics plans to seek additional products.
On March 2, 2015, the Company announced that it has closed a private placement of a promissory note for $10 million. The Company intends to use the proceeds from the offering to acquire medical technologies and products and create subsidiaries in which it can advance those technologies and products. The note matures in 36 months, provided that during the first 24 months the Company can extend the maturity date by six months. No principal amounts will be due for the first 24 months (or the first 30 months if the maturity date is extended). Thereafter, the note will be repaid at the rate of 1/12 of the principal amount per month for a period of 12 months. The note bears an 8% coupon payable quarterly during the first 24 months (or the first 30 months if the note is extended) and monthly during the last 12 months. National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc., acted as the sole placement agent for the offering. The note was sold in the private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The note has not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
On March 4, 2015 we announced the formation of a new subsidiary company, Checkpoint Therapeutics, Inc., to develop a portfolio of fully human immuno-oncology targeted antibodies generated in the laboratory of Dr. Wayne Marasco, MD, PhD, a Professor in the Department of Cancer Immunology and AIDS at the Dana-Farber Cancer Institute (“Dana-Farber”). Dr. Marasco will chair the Scientific Advisery Board of the Company. Under the terms of the agreement, Checkpoint will pay Dana-Farber an up-front licensing fee in addition to development and sales-based milestone payments and royalties on net sales. The portfolio of antibodies licensed from Dana-Farber includes antibodies targeting PD-L1, GITR and CAIX. Checkpoint plans to develop these novel immuno-oncology and checkpoint inhibitor antibodies on their own and in combination with each other, as data suggests that combinations of these targets can work synergistically together. Clinical trials are expected to start in the second half of next year. In connection with the license agreement with Dana-Farber, Checkpoint Therapeutics entered into a collaboration agreement with TG Therapeutics, Inc. to develop and commercialize the Anti-PD-L1 and Anti-GITR antibody research programs in the field of hematological malignancies.
Mr. Weiss, the Company’s Executive Vice President, Strategic Development, and Co-Portfolio Manager and Partner of OPPM with Dr. Rosenwald, is the Executive Chairman, Interim Chief Executive Officer and stockholder of TG Therapeutics, Inc. Checkpoint retains the right to develop and commercialize these antibodies in solid tumors. Both programs are currently in pre-clinical development. Under the terms of the agreement, TG Therapeutics will pay Checkpoint an up-front licensing fee as well as make development and sales-based milestone payments and will pay a tiered single digit royalty on net sales.
On March 10, 2015, JMC entered into a license and supply agreement to acquire rights to distribute a generic dermatological product. JMC made an upfront payment of $1,250,000 and will incur another fee of $750,000 upon receipt of product. Further payments will be made based on a revenue sharing arrangement.