Germany's MediGene says that a licensing deal it has signed with US firm CollaGenex represents "the final step" on its path to becoming a fully-integrated biotech company.

The firm has bought the European marketing rights to Oracea (doxycycline), CollaGenex's flagship dermatology product for the systemic treatment of the skin condition rosacea and under the financial terms of the deal, the US firm gets an upfront fee of $5 million upon signing of the agreement as well as an additional $7.5 million in milestone payments upon the achievement of certain revenue goals. In addition, CollaGenex will receive a royalty of 12% of annual net sales up to $10 million, rising to 15% if they get above the $10 million mark.

As a result of the deal, MediGene is putting together its own sales force to promote Oracea, which is due to be launched in Europe in the second half of 2007, as well as its own Polyphenon E Ointment, whose active substance is an extract of green tea which can be used to treat both external and perianal genital warts.

The latter has been approved in the USA and MediGene will file for approval in Europe soon. The company added that it sees peak annual sales of 50 million euros in major European markets for the two products combined.

MediGene's chief executive Peter Heinrich said that "the highest value creation for drugs is achieved by sales and marketing [and] for this reason we worked for a long time towards the buildup of our own sales organisation." He added that drug commercialisation through the firm's own field force "will enable us to increase the profit from our products, thus enhancing our attractiveness as a licensee."

Eligard launched in Italy

Meantime, MediGene also noted that prostate cancer drug Eligard (leuprolide) is now available in Italy, the last of the major European markets to introduce it. The German firm will receive a milestone payment from marketing partner Astellas Pharma Europe, as well as royalties.