UK-based GeneMedix and Penang Development of Malaysia have signed a letter of intent that will see the two establish a new company in the latter country's second city, at a cost of $34 million (€29m), for the development, manufacture and commercialisation of human insulin.
Under the terms of the agreement, GeneMedix will out-license its existing insulin know-how to the newly created entity and will use its experience to construct and operate a current Good Manufacturing Practices-compliant facility in Penang. The total investment in the project will be funded from a variety of sources including development loans, grants and an issue of equity in the new firm to local investors.
GeneMedix will receive an up-front milestone payment and royalty fee payable on sales of bulk product. Meantime, the development of the full-scale industrial process for insulin will be completed by GeneMedix at its own expense and transferred into the facility, which is scheduled for completion in mid-2005.