Covidien’s pharmaceutical products business unit has entered into a license and development collaboration agreement with Nuvo Research Inc., a Canadian drug development company.
The companies plan to collaborate on two topical formulations of a non-steroidal anti-inflammatory drug.
Under the license agreement between Nuvo and Mallinckrodt Inc., a subsidiary of Covidien, Nuvo (TSX: NRI) will receive a one-time upfront payment of $10 million and could receive additional development and sales milestone payments over the next several years, including a $15 million milestone payment on the drug's approval by the FDA, which will increase to $20 million if certain labeling criteria are agreed to by the FDA.
Covidien also will pay Nuvo a royalty on sales of products developed and commercialized under this license agreement. Nuvo will be eligible to receive additional escalating sales milestone payments for the products totaling up to $100 million.
Covidien will be responsible for all marketing, selling and medical education activities. Nuvo will own and maintain the intellectual property and will be responsible for manufacturing.
Covidien anticipates launch of the first product from this agreement in the first half of 2010.
"We are pleased to be collaborating with Nuvo Research on topical formulations of diclofenac and the opportunity to expand our branded pharmaceutical portfolio,” said Timothy Wright, sector president of Pharmaceutical Products and Imaging Solutions at Covidien, in a statement. “While we face difficult comparisons in 2010 in our Pharmaceutical business, we are excited about the potential of these products to accelerate our performance in 2011 and beyond.”
Covidien plc, formerly known as Tyco Healthcare, operates Covidien Imaging Solutions and Pharmaceutical Products, also known as Mallinckrodt Inc., which is located in St. Louis and provides medical imaging technology and pharmaceuticals. Covidien was spun off from Tyco International Ltd. in 2007.
With 2008 revenue of nearly $10 billion, Covidien has 3,000 employees in the St. Louis area and more than 41,000 employees worldwide.
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