26 August 2022 | Friday | News
Liminal BioSciences Inc. (Nasdaq: LMNL) ("Liminal BioSciences" or the "Company"), a development-stage biopharmaceutical company, announced today that, effective immediately, its long-term legacy Master Services Agreement, entered into in May 2015 as amended, relating to its previously owned plasma-derived therapeutics business ("CDMO Agreement"), was terminated by mutual agreement between the parties. The Company had previously sent an early five-year termination notice to terminate the CDMO Agreement in August 2021. The CDMO Agreement included a minimum purchase commitment of $9 million per year for the remainder of the contract.
This termination of the CDMO Agreement is part of the Company's previously disclosed objective to streamline its business, divest its non-core assets and eliminate contracts associated with its previously owned plasma-derived therapeutics business.
The Termination Agreement results in the termination of the CDMO Agreement effective immediately, and all obligations of the Company associated therewith, including any annual minimum purchase commitments. Under the terms of the Termination Agreement, Liminal BioSciences will pay a total of $18 million, of which $11.2 million was paid upon execution of the Termination Agreement and covers past sums due to the date of termination. The Company will make two further payments of which $3.4 million will be payable in the first quarter of 2023 and the remaining $3.4 million will be payable in the first quarter of 2024. The Termination Agreement contains customary releases.
"We are very pleased to have reached this agreement, which results in anticipated cash savings of approximately $33.1 million, and significantly reduces the last of our financial commitments relating to our previously owned plasma-derived therapeutics business", stated Bruce Pritchard, Chief Executive Officer of Liminal BioSciences.