Kos Pharmaceuticals and Barr Pharmaceuticals say that they have signed a co-promotion, licensing and manufacturing deal, which outs the lid on a patent dispute between the two firms over the former’s cholesterol-lowering drug, Niaspan (extended release niacin).

Kos, which saw its share price rise by almost 15% on the news to a new year-high, had been trying to block market entry of Barr’s copycat version of the $380 million dollar-a-year drug. The latter company had won tentative US Food and Drug Administration approval for 500mg, 750mg and 100mg versions of the drug, and expected to win the final green following the expiry of Kos’ 30-month stay under the Hatch-Waxman patent challenge provisions. A trial date had been set for February next year.

Under the terms of the deal, Kos and Barr’s Duramed subsidiary will co-promote the current Niaspan and Advicor (extended-release niacin/lovastatin) products, with Duramed set to receive a sales-based royalties. Barr will be able to launch generic versions of Niaspan and Advicor from September 2013 – four years before the last of Kos’ patents is due expire – but will pay Kos a portion of the profits generated from their sale.