Novelos Therapeutics and Mundipharma sign exclusive collaboration agreement in Europe and Japan

In parallel, Novelos has also closed a private placement with Purdue Pharma L.P. resulting in $10 million in gross proceeds through the sale of convertible preferred stock and warrants to purchase its common stock. Novelos sold 200 shares of Series E convertible preferred stock, having a stated value equal to $50,000 per share, a cumulative annual dividend of 9% of stated value and a conversion price of $0.65 per share of common stock. Purdue also received warrants expiring on December 31, 2015 to purchase an aggregate of 9,230,769 shares of common stock at an exercise price of $0.65 per share.

Under the terms of the collaboration agreement, Novelos may receive up to $25 million of launch milestones and $60 million of fixed sales-based payments. Novelos will receive a double-digit royalty, which increases as the annual sales increase in the licensed territories. Mundipharma will be responsible for certain development activities, regulatory submissions and commercialization of NOV-002 in the licensed territories. Novelos retains all rights and responsibilities in the U.S.A. and the rest of the Americas.