Mylan Laboratories has inked a deal to co-develop and sell its new antihypertensive nebivolol with Forest Laboratories.

Nebivolol, a new beta blocking drug, was deemed 'approvable' by the US Food and Drug Administration last year, and Mylan has been seeking a licensee as it exits the branded drug business in order to revert to its original focus as a generic drugmaker.

Under terms of the deal, Forest will pay Mylan $75 million, as well as potential future milestone payments. Mylan will also receive royalty payments based on sales of nebivolol, the company said.

Forest has agreed to assume all nebivolol development expenses for current and future development programmes, and will be responsible for all sales and marketing expenses. Mylan has retained an option to co-promote the product in the future.

The deal provides a welcome cash injection for Mylan, which is feeling the effects of growing competition in the US market for generic drugs which caused its revenues to drop 3% to $298 million in the third quarter of 2005.

The FDA’s ‘approvable’ letter asked for more preclinical data on the beta blocker. Mylan now says it has completed an additional preclinical study and is preparing to file the data with the agency.

Mylan also said it plans to seek FDA approval for the drug as a treatment of congestive heart failure sometime in the second half of 2006.

Nebivolol is already sold in more than 65 countries outside North America. Mylan licensed the US and Canadian rights to the drug from Johnson & Johnson subsidiary Janssen Pharmaceutica in 2001.