Cellegy Pharmaceuticals, Inc. and ProStrakan Group Limited have entered into an exclusive license agreement for the commercialization of Cellegesic (branded Rectogesic outside of the US) in Europe, the companies announced here.

Rectogesic is a 0.4% topical nitroglycerin ointment indicated for the treatment of the pain associated with chronic anal fissures. In September, the product was approved by the UK MHRA for sale in the UK.

Under the terms of the agreement, Cellegy will receive up to $5.6M in upfront and milestone payments, including payments if the product is approved in the future for the treatment of haemorrhoids, along with an amount that is in excess of 25 per cent of net sales of Rectogesic in Europe, including cost of goods. ProStrakan will be responsible for additional regulatory filings, sales, marketing and distribution of Rectogesic throughout Europe.

In all, the deal covers 38 European territories, including all EU member states. Cellegy will be responsible for supplying finished product to ProStrakan through its contract manufacturer. In addition, ProStrakan has granted a right of first negotiation to Cellegy for its oral estradiol-glucoside product, which is currently in phase 1 clinical development or an alternative product in the area of gastroenterology, the release from Cellegy said.

K. Michael Forrest, Cellegy's president and CEO said, "This partnership paves the way for the first commercial launch of a Cellegy product in a major pharmaceutical market outside the United States. We look forward to the commercial launch of Rectogesic in the United Kingdom and to the initiation of the Mutual Recognition Procedure to obtain regulatory approval for Rectogesic in other European territories. Assuming the normal timelines established for the MRP process, we expect Rectogesic to be approved in the balance of the major European countries by the third quarter of 2005."

Commenting on the deal, ProStrakan CEO, Dr Wilson Totten, said: "Having acquired the European rights to Tostrex in July this year, we are delighted to be building on our relationship with Cellegy by acquiring the rights to another of their products. Such acquisitions are a core part of ProStrakan's strategy, allowing us to significantly grow revenues by the commercialisation and promotion of attractive products through our own sales forces in Europe."

It is estimated that there are over one million people in Europe who suffer from anal fissures. An anal fissure is a painful tear in the lining of the anal canal and is associated with increased pressure in the anal canal and a decrease in blood supply.