Edwards Lifesciences and DexCom, a developer and marketer of home-based continuous glucose monitoring systems for patients with diabetes, have entered into a definitive collaboration agreement to develop products for continuously monitoring blood glucose levels in patients hospitalized for a variety of conditions.
The agreement provides Edwards with an exclusive license to all of DexCom's applicable intellectual property, according to the Irvine, Calif.-based Edwards.
Under the terms of the agreement, Edwards will pay the San Diego-based DexCom an upfront licensing and collaboration fee of $13 million in cash, resulting in a nonrecurring charge for Edwards in the fourth quarter of this year. Edwards said it will also pay up to $24 million over the next three years in product development costs and regulatory approval milestones. Edwards added that the research and development component of the payments will be approximately $7 million in 2009. In addition, DexCom said it will receive either a profit-sharing payment of ten percent or royalty of up to six percent of commercial sales.
Edwards will be responsible for global sales and marketing, which is expected to begin in 2010, and DexCom will be responsible for initial manufacturing.