Santarus expands co-promotion of Zegerid brand with Otsuka America

By Ted A. Knutson

Washington, Jan. 6 - Santarus, Inc. said Friday it has amended an agreement with Otsuka America Pharmaceutical, Inc. to expand its non-exclusive co-promotion activities to include Zegerid Capsules.

Under the amended terms, Otsuka America will co-promote Zegerid Capsules in addition to Zegerid Powder for Oral Suspension by providing a specified number of first position sales calls to targeted U.S. physicians and will not be required to make any further milestone payments.

Otsuka America will receive a high single-digit royalty on total net sales of these products, and Otsuka America will not retain any rights with respect to Zegerid Chewable Tablets

Under the original agreement, Otsuka America paid Santarus a $15 million upfront fee for the non-exclusive right to co-promote Zegerid Powder for Oral Suspension in the United States and had options to expand its co-promotion activities to Zegerid Capsules and Zegerid Chewable Tablets upon payment of additional milestone fees.

Under the amended terms, each party has the right to terminate the agreement at any time following June 30, 2007 by providing at least 120 days prior written notice.

The agreement will terminate automatically on Dec. 31, 2009, unless terminated earlier under the specified conditions.

In addition, the amended terms eliminate the provisions of the original agreement that provided Otsuka America with an opportunity to negotiate co-promotion rights for certain new products that might be developed by or on behalf of the company in the future, including any over-the-counter formulations of the Zegerid family of products.

Santarus, based in San Diego, is a pharmaceutical company focused on treatments for gastrointestinal disorders.

The announcement was made in an 8-K filing with the Securities and Exchange Commission.

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