Scotland’s ProStrakan has been boosted by the news that it has sold exclusive US marketing rights to its testosterone replacement gel to Endo Pharmaceuticals in a deal that could be worth up to $210 million.

Under the terms of the agreement, Endo will pay an upfront fee of $10 million to ProStrakan, which also is eligible to receive up to a further $40 million more in milestone payments by the end of 2010 if Fortesta (testosterone 2% gel) obtains US approval and achieves “early commercialisation events. Further payments of up to $160 million are payable to ProStrakan upon the achievement of certain sales targets of the treatment.

ProStrakan will supply Fortesta to Endo in the USA and will receive an undisclosed royalty. The Galashiels-headquartered company will use 50% of the proceeds from the upfront and FDA approval milestone
payments to reduce debt under its existing £50 million credit facility, of which it has currently drawn down £42 million.

The treatment, branded elsewhere as Tostran, Tostrex and Itnogen, is already marketed across Europe by ProStrakan’s own sales forces and is outlicensed to Bayer Schering Pharma in 147 countries. It is currently under review at the US Food and Drug Administration for male hypogonadism.

Wilson Totten, ProStrakan’s chief executive, noted that “the US testosterone gel market is the largest in the world” and partnering with Endo ensures that Fortesta “will achieve its full potential, becoming accessible to urologists and their patients across the USA”. He added that the deal means ProStrakan can continue its strategy of “focusing on our growing US oncology supportive care franchise”.

In 2008, the total US testosterone market was valued at $873 million, according to IMS, with transdermal gels representing 85% of that figure.