Liminal BioSciences terminates legacy CDMO contract
by CM Staff
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.
LAVAL — Liminal BioSciences Inc. has announced the termination of its long-term legacy Master Services Agreement relating to its previously owned plasma-derived therapeutics business (CDMO agreement).
The company explained that the decision to terminate the contract came through a 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.
The company explained that the termination of the CDMO agreement is part of its strategy to streamline its business, divest its non-core assets and eliminate contracts associated with its previously owned plasma-derived therapeutics business.
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.
“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,” said Bruce Pritchard, chief executive officer of Liminal BioSciences in a statement.
