Crossject

Crossject has just announced it has signed a licensing agreement with Eton Pharmaceuticals for the marketing of Zeneo Hydrocortisone in the US and Canada.

Eton Pharmaceuticals is a speciality pharmaceutical company focused on developing and commercialising innovative treatments for rare paediatric diseases. Adrenal crisis, the indication for hydrocortisone, is a potentially life-threatening rare medical condition requiring immediate emergency treatment (patients with adrenal insufficiency can go into adrenal crisis if their cortisol levels are too low). Under this agreement, Eton will be responsible for all regulatory and commercial activities, including licensing, regulatory filing fees, distribution, and promotion. Crossject will receive milestones of US$5m until the product reaches the market (US$0.5m upon signing, US$0.5m escrowed and the rest over three years). Once the product is marketed, Crossject will receive a “mid-double-digit” price for each Zeneo Cortisone sold, a 10% royalty on net sales and sales milestones of US$6m subject to three thresholds in Eton’s annual sales. In the US, Eton estimates that 100,000 people currently suffer from adrenocortical insufficiency and are at risk of adrenal crisis. Note we had expected sales of Zeneo Hydrocortisone to reach c. €22m in…2028 with a 50% probability of success, so we feel rather comfortable with the numbers mentioned (which again concern the US and Canada only) while the market launch will, however, come later than we had initially expected (no earlier than FY23 at best in our view vs FY22 in our numbers). The other positive piece of news of this release is that yet another pharmaceutical company after Desitin in Germany for Zeneo Midazolam seems to believe firmly in the group’s device. The remuneration of Crossject seems also OK with a decent unit price according to the group’s hint and a rather nice 10% in royalties on net sales once Zeneo Hydrocortisone reaches the market.

The share price has reacted very positively to this piece of news, the latter confirming our positive stance on the stock. We will not amend our numbers at this stage, but will update all our assumptions (i.e. on all product launches planned, both in terms of quantities and prices) within the next few days.