Critical Therapeutics licenses rights for VNS device.

Critical Therapeutics of Lexington, MA has granted an exclusive worldwide license to Innovative Metabolics for intellectual property rights related to the development and commercialization of medical device approaches to stimulating the vagus nerve.

The vagus nerve is believed to play a role in regulating the body's inflammatory response.

Under its agreement with Innovative Metabolics, which also is based in Lexington, MA, Critical Therapeutics is entitled to receive an initial license fee of $500,000 in cash plus a specified number of shares of preferred stock for Innovative Metabolics after completion of a financing by Innovative Metabolics. In addition, Critical Therapeutics will receive a one-time milestone payment of $I million after regulatory approvals are obtained.

Critical Therapeutics also is entitled to receive royalties based on future sales and a percentage of payments received by Innovative Metabolics in connection with any sublicenses.

"Licensing these patent rights allows us to monetize an asset that is not an area of focus for the company," said Critical Therapeutics CEO Frank Thomas. "While we have opted to out-license patent rights for both electrical and mechanical stimulation of the vagus nerve, we have retained our intellectual property rights associated with the development of a small molecule drug that acts on the alpha-7 receptor."

Innovative Metabolics is a privately held company founded by two of Critical Therapeutics' co-founders, Kevin J. Tracey and H. Shaw Warren.

Critical Therapeutics, Inc. is developing and commercializing products for respiratory, inflammatory and critical care diseases.