|ARDM 30% on partnership 'restructuring' -|
HAYWARD, CA--(MARKET WIRE)--Jul 5, 2006 -- Aradigm Corporation (Nasdaq:ARDM - News) today announced the execution of an agreement further developing the strategic partnership with Novo Nordisk. The agreement is designed to strengthen Novo Nordisk's patent position within the area of inhaled insulin as related products progress towards commercialization and has resulted in a non-dilutive cash infusion to Aradigm of $27.5 million. The Novo Nordisk inhaled insulin program is currently in Phase 3 clinical trials. This agreement is comprised of an intellectual property assignment, a royalty prepayment and an eight-year promissory note. The promissory note is secured by the royalty payments on the AERx Diabetes Management System (iDMS) sold under the Aradigm license.
The key features to the restructuring and cash infusion include:
-- Aradigm's receipt of $12 million in exchange for transferring to Novo
Nordisk the ownership of a select number of patents that are especially
important for inhaled insulin. Aradigm will retain exclusive, royalty-free
control of these patents outside the field of glucose control and will
continue to be entitled to royalties in respect to any inhaled insulin
products marketed by Novo Nordisk.
-- The receipt by Aradigm of $8 million in exchange for a 100 basis point
or 1% reduction on its average royalty rate set forth by the commercialized
AERx iDMS product. This will result in Aradigm receiving royalty rates that
will rise to an average of 5% or higher by the fifth year after
-- Finally, Novo Nordisk has paid Aradigm $7.5 million in a 5%, eight-
year note that is payable in three equal payments commencing in six years,
and is secured by the royalty payments to Aradigm upon the
commercialization of the AERx iDMS product.