Labopharm reworks agreement with Angelini for antidepressant Oleptro

LAVAL, Que. – Labopharm Inc. (TSX:DDS) has hammered out revised agreement with Gruppo Angelini, its joint venture partner for marketing the antidepressant Oleptro, the Quebec-based pharmaceutical company said Friday.

Under the new deal, Angelini will have exclusive rights for the drug in the U.S., Canada and other countries in exchange for royalties.

Meanwhile, Labopharm will no longer be responsible to fund Angelini Labopharm LLC, the joint venture established by the two companies to commercialize Oleptro in the United States.

“We believe that Oleptro is a valuable product for the treatment of depression and the restructured partnership provides us with the opportunity to benefit financially from the success of this product while enabling us to further preserve capital as we continue to progress with the strategic review process,” said Labopharm president and CEO Mark D’Souza.

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In exchange for dismantling the joint venture and turning its 50 per cent ownership interest in Angelini Labopharm over to Angelini, Labopharm will receive a royalty of five per cent on net sales of Oleptro in the United States in excess of US$10 million in any calendar quarter.

Net sales of Oleptro in the United States for the most recent quarter ended March 31 were US$908,000.

In addition, Labopharm will receive a royalty of five per cent on net sales of the drug in those countries for which it is granting rights to Angelini, including Canada.

Labopharm is also granting to Angelini an exclusive licence and rights to commercialize Labopharm’s twice-daily acetaminophen product in all European Union countries as well as Turkey, Georgia and the Commonwealth of Independent States – Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan – in exchange for a five per cent royalty and certain milestone payments.

Labopharm stock was up 2.5 cents, or more than 13 per cent, at 21.5 cents Friday afternoon on the Toronto Stock Exchange.