We will continue to explore strategies to achieve a similar purpose. In return for its gene therapy rights, HGSI will hold 19.9 percent of the new company's equity. Under the terms of the agreement, HGSI also will receive warrants for the purchase of additional 5.1 percent equity interest in Vascular Genetics which can be exercised at any time while the company is privately held. HGSI also holds preemptive rights that will permit retention of HGSI's ownership position in the event of a future financing. Vascular Genetics Inc. will pay royalties on net sales to HGSI from products developed and commercialized by Vascular Genetics Inc. or a sublicensee.
Royalty rates are competitive and increase as specified sales targets are reached.
In addition, HGSI has the option to manufacture VEGF-2 and the two future genes and receive a manufacturing fee. Human Genome Sciences is a company with the mission to develop products to predict, prevent, detect, treat and cure disease based on its leadership in the discovery and understanding of human and microbial genes. Any statements released by Human Genome Sciences, Inc. that are forward looking are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Editors and investors are cautioned that forward looking statements involve risks and uncertainties which may affect the Company's business prospects and performance.