Andrx Corporation and Takeda Chemical Industries, Ltd. jointly announce that they have entered into an agreement to develop and market a combination product consisting of Takeda's Actos (Pioglitazone) and Andrx's Fortamet (Metformin Extended Release), each of which is administered once-a-day for the treatment of type 2 diabetes. Actos is being marketed in more than 60 countries worldwide while Fortamet was the subject of an October 2003 approvable letter from the US FDA.

Once approved, Andrx will manufacture this combination product, and Takeda will hold exclusive marketing rights worldwide. Under the agreement, Takeda will be responsible for regulatory approvals for this combination product, and Andrx will receive US$10 million as an initial payment, significant additional milestone payments from Takeda upon the occurrence of certain specified events, as well as a transfer price, a royalty and certain additional performance payments related to Takeda's sale of the combination product.

Richard Lane, Andrx's CEO said: "One of Andrx's strengths is formulation technologies. The foundation of this expertise is Andrx's team of talented formulators who have the ability to use this technology to develop products such as this combination of Actos and Fortamet. We are delighted and excited to partner with Takeda, a recognized leader in pharmaceuticals worldwide."

Yasuchika Hasegawa, president & chief operating officer of Takeda said: "We believe this alliance will give Takeda access to Andrx's technology, and will contribute to maximization of the product value and consequently to the further growth of Actos, which is one of our international strategic products and was launched in the US in 1999 and now has yearly sales of more than US$1 billion."

Greater than 17 million people in the United States have diabetes mellitus, where the most common is type 2 diabetes (also known as non-insulin-dependent diabetes mellitus). Approximately 90 per cent of those diagnosed with diabetes are treated for type 2 diabetes, and over the last decade, the prevalence of type 2 diabetes has increased dramatically in all age groups. Type 2 diabetes occurs when the body is unable to effectively use the insulin in the body that is produced. Actos is an oral treatment for type 2 diabetes belonging to the thiazolidinedione class of drugs. It is known as an insulin sensitizer because it directly targets insulin resistance, a condition where the body does not effectively use the insulin it produces. Fortamet is an extended-release metformin that is intended to suppress hepatic glucose production and improve peripheral insulin sensitivity. The combination of Fortamet with Actos is intended to provide a complementary mechanism of action for the treatment of type 2 diabetes, and provide the patient with a more effective option to help achieve adequate blood sugar control.