Albunex Maker Signs $60-Million Distribution Deal

Molecular Biosystems will receive as much as $60 million from a unit of International Minerals & Chemical over the next four years under terms of an agreement giving it U. S. distribution rights to a Molecular Biosystems medical diagnostic product being developed.

The product is Albunex, an ultrasound imaging agent injected into cardiac patients. It will soon enter final stages of clinical testing. Molecular Biosystems claims Albunex will give cardiologists the first real-time images of blood flowing through both sides of the heart, pictures that could provide improved evidence of diseased tissue and blood vessels.

If the federal Food and Drug Administration approval process continues without a major hitch, Albunex could be on the market by early 1991. The product is made of microscopic bubbles of serum albumin, a naturally occurring blood byproduct that breaks down with no toxic side effects, the company said.

Albunex could seize a significant portion of the $400-million cardiac-imaging market if it receives FDA approval, Molecular Biosystems’ chief financial officer, Joyce Comeaux, said Thursday.

Of its total investment, Mallinckrodt Inc., the St. Louis-based division of IMC, will pay Molecular Biosystems as much as $27 million in license fees and research-and-development contract revenue. Molecular Biosystems, which has retained rights to manufacture Albunex for the U. S. market, received $6 million up front.

The rest of the $27 million will be paid in five increments over the next 18 months to 3 years, depending on whether Molecular Biosystems meets certain performance milestones during clinical tests and through the first commercial shipments of Albunex to Mallinckrodt.

Mallinckrodt will pay Molecular Biosystems $30 million more if Albunex meets an unspecified sales goal in its first full year on the market.

Finally, Mallinckrodt is buying 181,818 shares of Molecular Biosystems stock, or 2% of the total outstanding, for $3 million, or $16.50 a share, bringing Mallinckrodt’s total potential investment to $60 million. Molecular Biosystems stock closed up $1 at $14.25 in heavy over-the-counter trading Thursday.

Molecular Biosystems also would receive 40% of all net revenue from the sale of Albunex, an amount that could reach $35 million in the first year of sales, Comeaux said.

David Pritchard, Molecular Biosystems’ director of corporate development, said Mallinckrodt was selected because it is already a major player in the U. S. contrast-imaging market. Its leading product is Hexabrix, a contrast agent used to enhance X-rays of internal organs. Mallinckrodt, which sells a variety of other products, accounted for nearly half of IMC’s $1.5 billion in sales in fiscal 1988, he said.

Last year, Molecular Biosystems signed an $18-million agreement that gave Nycomed, a Norwegian pharmaceuticals firm, rights to manufacture, market and distribute Albunex in Europe, parts of Asia and Africa. Nycomed spent $5 million of its $18-million investment to acquire a 3% interest in Molecular Biosystems stock, the rest in license fees and contract research over a four-year period.

Although Albunex is the company’s big hope, Molecular Biosystems has yet to generate a significant portion of its revenue from product sales. Of the company’s $1.5 million in sales last year, only $165,769 were derived from products.