Neurobiological terminates license & cooperation pact with Merz Pharma and CMCC

Neurobiological Technologies, Inc (NTI) has entered into an agreement to terminate its license and cooperation agreement with Merz Pharmaceuticals GmbH (Merz) and Children's Medical Center Corporation (CMCC). Pursuant to the termination of the agreement, within 10 business days Merz will make a final payment to NTI in satisfaction of all its royalty and other obligations under the license and cooperation agreement. Also pursuant to the termination agreement, NTI and Merz agreed to a mutual release of all claims related to the license and cooperation agreement.

NTI also announced that it received a regularly scheduled royalty payment from Merz immediately prior to entering into the termination of the license and cooperation agreement.

Under the license and cooperation agreement, as amended in 2008, NTI and CMCC have been entitled to receive quarterly royalty payments from Merz on sales of Memantine in the United States, with scheduled reductions in the royalty rates. The termination of the agreement with respect to NTI does not affect the rights and obligations flowing between Merz and CMCC under the amended agreement. The royalty payment received and the termination payment due from Merz aggregate approximately $6 million and will be recognized as revenue in the quarter ending September 30, 2010, the first quarter of NTI's 2010 fiscal year.