NeurogesX enters into $40 million royalty financing agreement with Cowan Healthcare

By Lisa Kerner

Charlotte, N.C., April 30 - NeurogesX, Inc. announced a $40 million royalty financing agreement with Cowen Healthcare Royalty Partners, LP.

The agreement creates a debt obligation that will be repaid through and secured by royalties and future milestone payments payable to NeurogesX under its distribution, marketing and license agreement with Astellas Pharma Europe Ltd. for NeurogesX's Qutenza (capsaicin) 8% patch.

Under the agreement, Cowan Royalty will be entitled to receive up to 100% of all royalties and sales milestones as well as some other payments due to NeurogesX.

The agreement provides for royalties on net sales of Qutenza in the European Economic Area, including all 27 European Union member states, Iceland, Norway and Liechtenstein; Switzerland; and some countries in Eastern Europe, the Middle East and Africa.

Once the debt obligation has been satisfied, payments will revert to NeurogesX.

NeurogesX can retire the Cowen financing at any point and regain access to 100% of its European royalty interest in Qutenza.

"We believe this structure provides us with capital to continue executing our operating plan through at least 2011," chief operating officer and chief financial officer Stephen Ghiglieri said in a company news release.

NeurogesX is a San Mateo, Calif.-based biopharmaceutical company. Cowen is a health-care private equity firm.

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