Avanir Pharmaceuticals, a San Diego based biopharmaceutical company, announced that the Canadian Therapeutic Products Directorate (TPD) has issued a Notice of Compliance for docosanol 10% cream (Abreva) as a topical treatment for cold sores.

Abreva, which was discovered and developed by Avanir Pharmaceuticals, was successful in receiving non-prescription status, which allows the product to be sold over-the-counter (OTC). GlaxoSmithKline will market Abreva in Canada under an exclusive license agreement that provides royalties to Avanir based on wholesale product sales.

"The TPD's decision allowing Abreva to go directly to the OTC market provides cold sore sufferers access to medicine early in the disease cycle, which is the optimum time to treat cold sores," said Gerald J. Yakatan, Ph.D., president and CEO of Avanir Pharmaceuticals.

"GlaxoSmithKline's experience and success in marketing Abreva as an OTC product in the U.S. should help maximize this opportunity and, consequently, the royalty income that Avanir will receive. We hope Abreva will experience the same kind of consumer acceptance in Canada as it has in the U.S. This represents further achievement in our strategy to increase the Company's revenues."

Currently selling in the U.S. consumer market as Abreva, docosanol 10% cream was approved by the U.S. Food and Drug Administration (FDA) as an OTC product in July 2000. GlaxoSmithKline launched Abreva in the U.S. in October 2000 and, within a few months, Abreva became the product category leader in retail sales. Since the product was launched in the U.S., Abreva has grown to over 38% market share of the OTC lip remedies category in retail sales. Abreva is the only cold sore product approved by the FDA for the over-the-counter market, and was recently recognized as the number one pharmacist recommended cold sore treatment in the OTC market.

"Docosanol 10% cream has a novel mechanism of action and is most effective early in the course of an outbreak. As a result, docosanol 10% cream reduces the length of time patients experience discomfort from cold sores," said Stephen Sacks, M.D., a leading clinician and scientist in the field of antiviral therapy and founder and president of Viridae Clinical Sciences, Inc. in Vancouver, British Columbia. "This product will provide an important new topical treatment option for my patients."

There are approximately 31 million people in Canada. As in other parts of the world, potentially 80% of the population could carry the virus that causes cold sores. The company estimates that approximately 30% or roughly 7.5 million people in Canada will have outbreaks of at least one cold sore episode per year.

GlaxoSmithKline will be marketing Abreva in Canada as part of a license agreement signed by the two companies in March 2000. The license agreement gives GlaxoSmithKline the rights to market the drug in both the United States and Canada. In Canada, provincial approval of the product is necessary before product launch can occur, requiring a presentation before the national drug scheduling recommendation committee (NDSAC). As part of launch preparations for Abreva, GlaxoSmithKline is scheduling a presentation for the NDSAC meeting in September 2002.

In pursuit of additional uses for docosanol 10% cream and to further develop its docosanol franchise, Avanir is currently evaluating the efficacy and safety in animal models of new topical formulations of docosanol that could be used to treat genital herpes. The company recently was awarded $1.2 million in outside funding for development of a potential genital herpes product from grants awarded by the National Institutes of Health Small Business Innovation Research program and by the California Trade, Technology and Commerce Agency.

Avanir has expanded its docosanol franchise through license agreements, regulatory filings and research agreements throughout the world. In addition to the United States and Canada, Avanir has license agreements in place in Korea, Israel, and selected Middle-Eastern countries. Avanir has filed for regulatory approval in Sweden and intends to seek one or more licensees to market the product in Europe.

In January 2002, Avanir and Shanghai New Asiatic Pharmaceutical Company, Ltd., a division of the largest state-owned pharmaceutical conglomerate in the People's Republic of China, entered into a research and development agreement to explore the commercialization opportunities of docosanol 10% cream as a treatment for cold sores. Additional indications of docosanol 10% cream that could include genital herpes and herpes zoster, also known as shingles, may also be explored under this agreement.