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ZLCS > SEC Filings for ZLCS > Form 8-K on 3-Feb-2014All Recent SEC Filings

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Form 8-K for ZALICUS INC.


3-Feb-2014

Entry into a Material Definitive Agreement, Termination of a Material Definitive Agr


Item 1.01 Entry into a Material Definitive Agreement.

On January 31, 2014, Zalicus Pharmaceuticals Ltd., a wholly owned subsidiary of Zalicus Inc. (collectively, "Zalicus"), and Mallinckrodt Medical Imaging - Ireland, an affiliate of Mallinckrodt plc ("Mallinckrodt"), entered into a Royalty Purchase Agreement (the "Royalty Purchase Agreement") relating to the Asset Purchase Agreement, dated as of June 11, 2009, between Zalicus and Mallinckrodt Inc., as amended (the "Asset Purchase Agreement"). Under the Asset Purchase Agreement, Zalicus was entitled to ongoing royalty payments based on net sales of the product ExalgoŽ by Mallinckrodt, and has received $16.0 million in royalty payments to date since the commercial launch of Exalgo in April 2010. Under the terms of the Royalty Purchase Agreement, in exchange for the payment of $7.2 million from Mallinckrodt to Zalicus on January 31, 2014, Zalicus has terminated any further rights it has to the payment of royalties on net sales of Exalgo by Mallinckrodt.

The Royalty Purchase Agreement is included as Exhibit 10.1 to this current report on Form 8-K and is incorporated herein by reference. The foregoing descriptions of such agreement, and the transactions contemplated thereby, is qualified in its entirety by reference to such exhibit.



Item 1.02 Termination of a Material Definitive Agreement.

On January 31, 2014, Zalicus prepaid its outstanding term loans of approximately $8.65 million to Oxford Finance LLC ("Oxford") under the Loan and Security Agreement, dated as of December 22, 2010, as amended (the "Loan and Security Agreement"). The proceeds from the Royalty Purchase Agreement of $7.2 million, along with the royalty payment of approximately $2.0 million to Zalicus from Mallinckrodt for net sales of Exalgo for the quarter ended December 31, 2013, were sufficient to prepay the remaining balance of approximately $8.65 million under the Loan and Security Agreement. As a result, the Loan and Security Agreement is terminated effective January 31, 2014, and Oxford has released all security interests in Zalicus' tangible and intangible property.



Item 2.01 Completion of Acquisition or Disposition of Assets.

The information set forth in Item 1.01 regarding the Royalty Purchase Agreement is incorporated by reference into this Item 2.01.



Item 2.02 Results of Operations and Financial Condition.

The information set forth in Item 1.01 regarding the royalty payments to Zalicus since the commercial launch of Exalgo in April 2010, the information set forth in Item 1.02 regarding the Exalgo royalty payment to Zalicus for the quarter ended December 31, 2013 and the information set forth in Item 7.01 regarding the Zalicus' unaudited cash, cash equivalents, restricted cash and short term investments as of December 31, 2013 are incorporated by reference into this Item 2.02.



Item 7.01. Regulation FD Disclosure.

As of December 31, 2013, Zalicus had cash, cash equivalents, restricted cash and short-term investments of $19.8 million (unaudited).



Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.   Description
10.1          Royalty Purchase Agreement, dated as of January 31, 2014, by and
              between Zalicus Pharmaceuticals Ltd. and Mallinckrodt Medical Imaging
              - Ireland.

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