Labopharm Inc, through its Labopharm Europe subsidiary, has finalized a definitive distribution and licensing agreement with Hexal AG to market and sell Labopharm's once-daily formulation of tramadol in Germany, the largest pharmaceutical market in Europe.

Terms of the agreement are consistent with those of previously announced agreements, including an initial milestone payment due Labopharm upon receipt of its first regulatory approval in Europe, an official release informed.

"We have assembled a very strong group of European partners, securing agreements for approximately 80 per cent of the US$410 million in European tramadol sales in 2003," said James R Howard-Tripp, president and CEO, Labopharm Inc. He added, "We are in advanced discussions with potential partners for other important markets in Europe and continue to move steadily forward in our negotiations with potential partners in the United States."

Under terms of the agreement, Labopharm will receive payments for achieving certain milestones through to regulatory approval and will share revenue from product sales. Labopharm will supply Hexal with finished packaged product through its Labopharm Europe subsidiary. Labopharm will be responsible for obtaining regulatory approval in Germany.

"We are increasingly excited about the commercial potential of our tramadol product in Europe," continued Howard-Tripp. "Over the past five years, annual sales of tramadol products in Europe have more than doubled. With the largest seller of controlled-release tramadol as our partner for Germany, where tramadol sales reached US$108 million in 2003, we are well positioned to capitalize on this significant commercial opportunity," he concluded.

In March 2003, Labopharm initiated the regulatory approval process in Europe for its once-daily formulation of tramadol, commencing the Mutual Recognition Procedure (MRP) with the submission of a Marketing Authorization Application (MAA) with regulatory authorities in France.

Following the favourable review of the clinical component of its Marketing Authorization Application (MAA) in France earlier this year, and having fully responded to the French regulatory Agency's questions regarding the chemistry, manufacturing and control (CMC) portion of its submission, Labopharm is awaiting the Agency's response, the release says.