Loan Agreement

Winnersh, England: (Feb-20-08) Endo Pharmaceuticals Inc. brought a lawsuit against Vernalis, over a loan agreement dispute between the two pharmaceutical companies. The suit stated that the outstanding balance on the loan, which was originally due for repayment in August 2009, was approximately $56 million. Sources close to the case revealed that a settlement was reached between the parties, in which Vernalis is implementing a major restructuring of the Company and its operations, which will substantially extend the cash runway of the business. The early loan settlement and the restructuring were both triggered by the FDA's recent non-approval of the Company's supplementary NDA submission for its product Frova for the treatment of menstrual migraine. Additionally, Vernalis will pay Endo $7 million in cash and forego future royalties on US sales of Frova(R), until annual US net sales exceed a threshold of $85 million. Company spokespersons stated that for sales in excess of $85 million and for all other terms, the license agreement remains unchanged. Frova's US sales for the first nine months of 2007 amounted to $38 million. [PHARMALIVE: LOAN AGREEMENT]

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Published on Feb-21-08