Endo Pharmaceuticals Inc has entered into an agreement granting Endo the exclusive rights to develop and market Orexo AB's (a privately held Swedish company) patented sublingual muco-adhesive fentanyl product (Rapinyl) in North America. Rapinyl is an oral, fast-dissolving tablet of fentanyl intended for the treatment of breakthrough cancer pain.

The agreement provides for Endo to make an up-front license fee payment of $10 million, in addition to other license fees and payments based on development and regulatory milestones, which may total up to $22.1 million through FDA approval of Rapinyl's New Drug Application. The agreement also provides for double-digit royalties upon commercial sales and may include sales milestones if defined sales thresholds are achieved.

"We are delighted to add this novel proprietary product to our portfolio," said Carol A Ammon, chairman and chief executive officer of Endo. "We believe that this product is an excellent strategic fit for us and reinforces our continued leadership position in pain management. The benefits of Rapinyl are believed to include both a fast onset of action and added convenience, which we believe will improve compliance in cancer patients who experience breakthrough pain," he added.

"We are very pleased to be partnering Rapinyl with Endo Pharmaceuticals for the North American market," Zsolt Lavotha, president and chief executive officer of Orexo AB said.

Rapinyl is based on Orexo's unique patented technology for sublingual administration. This novel pharmaceutical preparation is believed to provide rapid absorption of the active substance and a fast onset of action. Currently in Phase II clinical development, this product has demonstrated enhanced absorption characteristics and is intended for the management of breakthrough pain in opioid-tolerant cancer patients. Endo anticipates that it will commence Phase III clinical trials in 2005.