Cipher Pharmaceuticals (TSX:DND) has entered into a distribution and supply agreement with Vertical Pharmaceuticals to market Cipher’s CIP-TRAMADOL ER in the U.S. for the treatment of moderate to moderately severe chronic pain in adults.
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“Completing a commercial supply agreement for our extended-release tramadol represents another important achievement for our organization and provides an additional revenue stream to support our continued growth,” CEO Larry Andrews said in a statement.
“With its experienced, entrepreneurial leadership team and strong promotional commitment behind this product, we believe Vertical is well positioned to penetrate the U.S. tramadol market,” he added.
Under the accord, Cipher received an initial upfront payment of $500,000 with additional payments totaling $1 million due on the first commercial sale of the product. Cipher is also eligible to receive future payments of about $4 million, subject to achieving certain sales milestones.
Cipher also will receive a royalty on net sales in the mid-teens. It is responsible for product supply and manufacturing, which will be fulfilled by its partner, Galephar Pharmaceutical Research.
Vertical plans to launch the product in third quarter of 2011 under the trade name ConZip. It will have a dedicated sales force of 60 representatives at launch, with plans for further expansion in the first half of 2012.
Steve Squashic, President of Vertical, said, “We are excited about the opportunity in the large and growing U.S. tramadol market, where there were more than 36 million tramadol prescriptions written last year.
“ConZip’s unique capsule formulation, comprising an immediate-release tablet and sustained-release beads, combined with having no food effect, will make it an attractive alternative for clinicians and chronic pain sufferers,” Vertical president Steve Squashic said in a statement. “It will immediately become our flagship product.”
