Columbia pays $12 million true-up payment early to PharmaBio

By Lisa Kerner

Erie, Pa., April 17 - Columbia Laboratories, Inc. agreed to pay $12 million of a true-up payment to PharmaBio Development, Inc. seven months before the Nov. 14 due date.

The true-up payment is the difference between royalties paid from the third quarter of 2003 to Nov. 14, 2006 and $13 million as part of the companies' original March 2003 agreement, according to a form 8-K filing with the Securities and Exchange Commission.

Under the agreement, PharmaBio paid $15 million to Columbia over a 15-month period in return for 9% royalty on net sales of Striant (testosterone buccal system) in the United States up to agreed annual sales levels, and a 4.5% royalty of net sales above those levels, with a seven-year royalty term.

Through Dec. 31, Columbia paid $712,000 in royalties to PharmaBio, resulting in a true-up payment of about $12 million.

Livingston, N.J.-based Columbia develops pharmaceuticals for women's health and for endocrine-related disorders.

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