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An exclusive global licensing and research collaboration agreement between AstraZeneca (NYSE: AZN) and Palatin Technologies (AMEX:PTN) has recently been established for the discovery, development and commercialization of small molecule compounds targeting melanocortin receptors.

The collaboration will be based from Palatin’s melanocortin receptor obesity programme and intends to finalize selection of a lead drug candidate for clinical evaluation.

The terms of agreement include:

• Palatin will receive an upfront payment of $10 million from AstraZeneca and is eligible for milestone payments totalling $300 million, with up to $180 million contingent upon development and regulatory milestones and the balance on achievement of sales targets, together with the payment of stepped royalties on product sales to double digit rates, dependent on sales achieved.
• AstraZeneca will assume responsibility for product commercialisation, product discovery and development costs, with both companies contributing scientific expertise in the research collaboration.