QRxPharma signs licensing deal with Actavis

QRxPharma (ASX:QRX) has finalised an agreement to license its MoxDuo IR pain relief capsule to generic pharmaceutical company Actavis.

Under the terms of the agreement, Actavis has gained the exclusive right to commercialise and further develop MoxDuo IR in the US market.

QRxPharma will be entitled to royalties of 50% of sales during the first 3-6 months, up to a maximum of US$150 million ($141.6 million) in cumulative sales. Thereafter, royalties will be between 10% and 30% of revenues, depending on sales thresholds.

QRxPharma will be responsible for manufacturing the product, through contract manufacturer DSM Pharmaceuticals. But Actavis will assume all costs for launching, marketing and selling the product in the US market.

While the deal is an exclusive, QRxPharma will retain the right to provide up to 25% of selling efforts to the US market at any time after the first year of commercial sales.

The terms also leave open an option to expand the agreement to cover controlled-release version MoxDuo CR, as well as MoxDuo IV, a formulation designed for intravenous use.

The agreement is broadly the same as the proposal spelled out in the letter of intent to enter the partnership.

QRxPharma has revealed it received a US$6 million ($5.7 million) upfront signing fee when the binding letter of intent was signed in December last year.

MoxDuo IR is a dual-opioid (morphine and oxycodone) immediate release analgesic which promises to deliver the same results with fewer side-effects than either of the two drugs alone.

QRxPharma filed a New Drug Application for the product with the US FDA in mid-2011. This application was accepted in November, and the FDA has revealed it expects to decide whether to grant approval by June 25 this year. The product is then scheduled to launch in the third calendar quarter.

QRxPharma is based in Sydney, but also has a US headquarters in Bedminster, New Jersey. The company is dual-listed on the ASX and the US OTCQX.

QRxPharma (ASX:QRX) shares stayed flat on Monday at $1.830.