On October 15, 2010, Celgene acquired Abraxis BioScience, Inc. (or “Abraxis”)
Upon the close of the transaction, Abraxis stockholders (other than stockholders who validly perfect appraisal rights under Delaware law) received one CVR for each share of Abraxis common stock that they held along with other compensation.
Under the terms of the CVR, payouts are triggered by net sales of Abraxane in excess of $1 billion per year. Each holder of a CVR is entitled to receive a pro rata portion, based on the number of CVRs then outstanding, of net sales related payments, calculated as follows:
2.5% of the net sales of ABRAXANE that exceed $1.0 billion but are less than or equal to $2.0 billion for such period, plus
an additional amount equal to 5% of the net sales of ABRAXANE that exceed $2.0 billion but are less than or equal to $3.0 billion for such period, plus
an additional amount equal to 10% of the net sales of ABRAXANE that exceed $3.0 billion for such period.
The net sales payments will continue until December 31, 2025 and may be extended if the net sales of ABRAXANE are greater than $1.0 billion for the year ended December 31, 2025, in which case the payments will continue until the earlier of: (i) the first fiscal year after December 31, 2025 in which net sales of ABRAXANE are less than $1.0 billion or (ii) December 31, 2030.
For additional information, the fully executed Abraxis/Abraxane CVR agreement can be found here: https://www.sec.gov/Archives/edgar/data/816284/000095012310093505/y87192exv4w1.htm