Chapel Hill drug developer Cempra Pharmaceuticals announced a licensing agreement Tuesday worth up to $70 million and structured to help the underfunded company finance development of its most promising antibiotic treatment.
Under the deal, Toyama Chemical Co. will have exclusive rights in Japan to develop and commercialize solithromycin, Cempra's lead experimental drug. In exchange, Cempra will receive an upfront payment of $10 million and up to $60 million in milestone payments.
Cempra said Japan is the world's second-largest antibiotic market and Toyama "will commit significant resources" to developing solithromycin, a treatment for pneumonia and respiratory tract infections.
Cempra is a 13-year-old company with 31 employees and no revenue other than money put up by investors. The deal with Toyama, a subsidiary of Fujifilm Holdings Corp., is Cempra's first licensing agreement; it will supplement cash raised in an initial public offering last year.
Cempra raised $54.7 million through the public sale of stock, less than it expected to generate, which prompted a global search for a business partnership to continue developing solithromycin.