Medtronic (NYSE:MDT) has licensed a compound for spinal cord and traumatic brain injury that could net the Minnesota-based maker of new innovative medical devices up to $35 million before commercialization.
New York’s Acorda Therapeutics (NASDAQ:ACOR) said it paid an initial $3 million for the compound, a proprietary magnesium formulation called AC105. It would pay Medtronic another $32 million should it meet certain regulatory and development milestones.
If the product is commercialized, then Medtronic will get a single-digit sales royalty from Acorda.
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Acorda is a biotech company that develops treatments for multiple sclerosis, spinal cord injury and other nervous system disorders. The company has $234.5 million in annual revenue.
Acorda said it intends to study Medtronic’s magnesium formulation to develop an acute treatment for people who have undergone neurological trauma.
The National Spinal Cord Injury Statistical Center estimates that in 2010, 232,000 to 316,000 people lived with spinal cord injury in the United States. The Centers for Disease Control and Prevention estimates that 1.7 million sustain a traumatic brain injury annually.
Direct medical costs and indirect costs such as lost productivity of TBI totaled an estimated $60 billion in the United States in 2000.
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Acorda’s news release also stated:
Acorda’s development and commercialization rights are exclusive in all fields (including SCI, TBI and stroke) for certain formulations of the licensed compound. For other formulations, Acorda’s rights are exclusive for indications of interest to Acorda, including SCI, TBI, stroke and all other traumatic and ischemic central nervous system indications, while Medtronic has non-exclusive (with Acorda) development rights in specific areas, including certain areas of pain and musculoskeletal indications.
