Biopharmaceutical company NeurogesX Inc. said Friday it has entered a $40-million royalty financing agreement with Cowen Healthcare Royalty Partners.
NeurogesX said its debt obligation will be repaid through royalties and milestone payments it receives under a distribution agreement with Astellas Pharma Europe Ltd. for its Qutenza pain patch.
Qutenza treats nerve pain associated with postherpetic neuralgia. NeurogesX sells it in the United States. The Astellas agreement provides royalties on Qutenza sales in the European Economic Area, which includes European Union members and some countries in the Middle East and Africa.
After the debt obligation is fulfilled, payments under the Astellas agreement revert to NeurogesX. Cowen does not receive payments on U.S. sales.
NeurogesX said in a statement the financing gives the company capital "to continue executing our operating plan through at least 2011."
Shares of the company rose 27 cents, or 2.7 percent, to $10.27.