This morning, Santarus, Inc. (SNTS) entered into a licensing agreement with Norgine B.V., a European specialty pharmaceutical company. Under the licensing agreement, Norgine has been granted exclusive rights for the development, manufacture and commercialization of prescription immediate-release Zegerid products incorporating the proton pump inhibitor (PPI) omeprazole in combination with one or more buffering agents in specified markets in Western, Central and Eastern Europe.

As per the terms of the agreement, Santarus will receive an upfront fee of $2.5 million. Moreover, Santarus will be entitled to receive up to $10 million in milestone payments based on the achievement of certain regulatory events, subject to certain reductions based on actual out-of pocket costs incurred by Norgine for the product. Santarus will also receive tiered royalties in the mid- to high-teens range on net sales of any products sold under the agreement.

Zegerid is Santarus’ flagship product, which has captured a nice niche of the gastroesophageal reflux disease market. Zegerid is approved by the U.S. Food and Drug Administration (FDA) for the treatment or reduction of the risk of a variety of upper gastrointestinal diseases and disorders. It is currently marketed as capsule and powder for oral suspension dosage forms. The FDA is currently reviewing applications for the approval of a tablet and over-the-counter (OTC) version of Zegerid.

We are pleased with this deal, which should help maximize the value of the company’s patented PPI technology. Norgine should be a suitable partner given its focus on the gastroenterology market.

The deal with Norgine is the latest in a series of agreements entered into by Santarus for Zegerid. The company has agreements with GlaxoSmithKline (GSK) and Schering-Plough (SGP) for the Zegerid brand of products.

We currently have a Neutral rating on Santarus. The approval of the tablet and over-the-counter formulations of Zegerid, potentially later this year, as well as the launch of Zegerid around Europe by EU partner, GlaxoSmithKline, present potential positive catalysts for the company.
Read the full analyst report on “SNTS”
Read the full analyst report on “GSK”
Read the full analyst report on “SGP”
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