Germany’s Schwarz Pharma has licensed fesoterodine, a drug for overactive bladder, to Pfizer in return for an upfront payment of $100 million, settling patent litigation between the two companies.

The size of the deal, which also includes milestone payments of up to $110 million and royalties on sales, reflects the fact that fesoterodine has already been filed for approval with both the US Food and Drug Administration and the European Medicines Agency (EMEA). The anti-muscarinic agent has peak sales potential of around 450 million euros ($548m) a year, according to Schwarz.

Pfizer already sells a similar drug for overactive bladder called Detrol (tolterodine), and litigation with Schwarz centred on the fact that fesoterodine is a metabolite of Pfizer’s drug. As part of the settlement between the two companies Schwarz will also receive royalties on sales of this product line. Detrol and a once-daily version, Detrol LA, are approaching blockbuster status with combined sales of $988 million last year, up 9% year-on-year.

Fesoterodine is one of a series of proprietary products in late-stage development at Schwarz which are intended to reduce its reliance on its generic version of omeprazole, a gastrointestinal drug sold by AstraZeneca as Losec/Prilosec. The other candidates include lacosamide for epilepsy and neuropathic pain and patch-based Parkinson’s disease treatment Neupro (rotigotine), which has just been launched in the UK.

For the German company, the agreement takes a lot of the risk out of fesoterodine’s development, and adding Pfizer’s established sales channels for overactive bladder should ensure rapid take-up of the new product, if it secures approval.

Last week, Schwarz presented data from a Phase III trial comparing fesoterodine to placebo and tolterodine at the European Association of Urology meeting in Paris, France. The results showed that Schwarz’ drug was significantly better than placebo in controlling incontinence symptoms in overactive bladder patients, and also performed better than tolterodine on a number of measures.