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Theratechnologies, EMD Serono in HIV tesamorelin licensing deal
November 2008

MONTREAL—Theratechnologies Inc. and EMD Serono Inc., an affiliate of Merck KGaA, Darmstadt, Germany, announced the companies entered a collaboration and licensing agreement for the exclusive commercialization rights to tesamorelin in the United States for the treatment of excess abdominal fat in HIV patients with lipodystrophy. Theratechnologies retains all tesamorelin commercialization rights outside of the U.S.

Under the terms of the agreement, Theratechnologies will receive an upfront payment of $30 million, which includes a license fee of $22 million and an equity investment of $8 million in Theratechnologies common stock by Merck KGaA, providing Merck KGaA a 3.6 percent ownership in Theratechnologies. Theratechnologies may receive up to $215 million in total payments, including the upfront payment, and payments based on the achievement of certain development, regulatory and sales milestones. Theratechnologies will be entitled to receive increasing royalties on annual net sales of tesamorelin in the United States.

"EMD Serono has a major presence in the area of HIV-associated disorders and growth hormone with drugs such as Serostim. Its strong track record of successfully commercializing new drugs as well as its unique expertise in endocrinology and its understanding of HIV-associated lipodystrophy makes EMD Serono an excellent strategic partner to bring the value of tesamorelin to patients in need, post-approval," commented Yves Rosconi, president and CEO of Theratechnologies.

The announcement marks the end of a strategic review process Theratechnologies announced earlier this year and led by the Independent Committee of the Board of Directors.

Speaking on behalf of the Independent Committee, Paul Pommier, chairman of the board of directors of Theratechnologies, stated: "We are extremely pleased to have entered into this strategic agreement with EMD Serono after a careful and rigorous review of all alternatives available to the company. EMD Serono's strong commercialization expertise, demonstrated success and unique understanding of HIV-associated disorders, including lipodystrophy, solidified our decision to partner tesamorelin as it provides us with the best opportunity to maximize the present and future potential of this drug and provide it to patients promptly following approval. We believe this landmark agreement provides a clear validation of tesamorelin's potential and successful commercialization should provide attractive value to our shareholders in the near term."

Tesamorelin is a growth hormone-releasing factor analogue with therapeutic potential in a variety of anabolic and lipolytic indications and is in the final stages of its second Phase III clinical trial to assess the safety and efficacy when used to reduce visceral adipose tissue in HIV patients with lipodystrophy.

"We are excited about this collaboration and believe that EMD Serono's scientific expertise, established physician relationships and highly trained specialty sales force coupled with Theratechnologies' regulatory experience and understanding of HIV-associated disorders will ultimately benefit patients. Together, I am confident that our teams can maximize the potential of tesamorelin in the marketplace and we are looking forward to the opportunities for tesamorelin in the U.S., once approved," says Fereydoun Firouz, president and CEO of EMD Serono. "This partnership reinforces our commitment to our endocrinology franchise in the U.S. and specifically to the field of HIV-associated disorders. Tesamorelin, with its strong clinical data, will address an important market that we currently cannot serve and is a key addition to our portfolio. Together, our organizations are best suited to bring to patients a potential treatment option for an unserved illness." DDN



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