Anglo-Swedish drugmaker AstraZeneca says that it has signed an exclusive licensing deal with Pozen to co-develop fixed dose combinations of naproxen and esomeprazole for chronic pain.

The project will make use of Pozen’s proprietary formulation technology and will aim to develop a medication for chronic pain sufferers that has good efficacy without some of the lower gastrointestinal tract side effects that are associated with currently, available treatment options.

Under the terms of the deal, AstraZeneca will pay Pozen an upfront fee of $40 million, as well as milestone payments that could total $160 million if the drug achieves certain developmental and regulatory goals. In addition, Pozen could be entitled to a further $175 million in royalty payments based on the sales of the drug if it is successfully commercialized.

Development of the product will be funded by both firms, with Pozen assuming responsibility for US R&D activities and regulatory filings, while AstraZeneca carries out the same role in all territories outside the USA. Phase III clinical development is expected to start in 2007.