Bristol-Myers Squibb Company and Somerset Pharmaceuticals, Inc., a joint venture between Mylan Laboratories and Watson Pharmaceuticals, Inc., have entered into an agreement for the commercialization and distribution of Somerset's Emsam (selegiline transdermal system), an investigational monoamine oxidase inhibitor administered as a transdermal patch for the acute and maintenance treatment of patients with major depressive disorder.

Somerset received an "Approvable" letter from the US FDA for Emsam in February 2004, and if approved by the FDA, Emsam would be the first transdermal treatment for major depressive disorder.

Under the terms of the agreement, Bristol-Myers Squibb receives exclusive distribution rights to commercialize Emsam, if approved, in the US and Canada, with an opportunity to negotiate, within a specified time frame, rights in any or all of the rest of the world. Financial terms were not disclosed, however, Somerset will receive an upfront payment and a further payment following regulatory approval in the US. In addition to the upfront payment, Somerset will receive milestone payments based on achievement of certain sales levels, as well as the reimbursement of certain development costs incurred over the term of the agreement. Somerset will supply product to Bristol- Myers Squibb and receive royalties on Bristol-Myers Squibb sales of Emsam, according to the release from BMS.

"This agreement with Somerset Pharmaceuticals marks a continued step forward in our efforts to deliver new and effective treatments to people with psychiatric disorders," said Anthony Hooper, president, US Pharmaceuticals, Bristol-Myers Squibb. "This collaboration exemplifies our new corporate strategy which focuses our efforts on 10 disease areas, including affective disorders such as major depressive disorder. We look forward to partnering with Somerset in a venture that could provide an alternative for physicians treating patients with this disorder," he added.

Mel Sharoky, Somerset's president and chief executive officer said, "Together with our partner, we look forward to working with FDA on Emsam because there is a need for additional treatment options for major depressive disorder. The Emsam clinical programme, to date, has involved more than 2,000 patients with major depressive disorder."

Approximately 19 million adults in the US, or close to 10 per cent of the American population, suffer from major depressive disorder. Depression costs US employers about $31 billion a year in productivity, not including disability-leave payments.