Meda corporate partnership

On May 6, 2010, Adeona Pipex, its wholly owned subsidiary, entered into a sublicense agreement with Meda AB, a multi-billion dollar international pharmaceutical company, pursuant to which Meda AB assumed all future development costs and may commercialize flupirtine for fibromyalgia in the United States. As consideration for such sublicense, Adeona received an up-front payment of $2.5 million and is entitled to milestone payments of $5 million upon the FDA’s acceptance of the New Drug Application (NDA) for flupirtine for fibromyalgia and $10 million upon FDA approval of such NDA. Pursuant to the sublicense agreement, Adeona will also receive a 7% royalty on net sales of flupirtine for fibromyalgia in the United States, Canada and Japan, with such royalties being shared equally with Adeona’s licensor, McLean Hospital, a Harvard teaching hospital.

Flupirtine is approved and marketed by Meda AB and its distributors in Europe and other countries for indications other than fibromyalgia and has been prescribed to millions of patients worldwide. Adeona believes that such substantial human experience with flupirtine should greatly assist the FDA in its evaluation of the safety of flupirtine upon review of an NDA of flupirtine for fibromyalgia. According to Meda’s 2010 Annual Report, flupirtine for fibromyalgia is currently in Phase II development.