ProStrakan US outlicensing buoys shares

Published on Wednesday 26 August 2009 21:44

PROSTRAKAN shares hit a record high yesterday after the group announced its largest-ever drug outlicensing deal, earning it an immediate $10 million (£6.2m) payment, writes Hamish Rutherford.

The Borders pharmaceutical group has granted US company Endo the exclusive rights to market Fortigel, its testosterone gel, in the US.

In return, Endo will pay Galashiels-based ProStrakan $10m initially, and up to a further $200m more if it hits a series of targets in the future.

The US is the world's largest testosterone replacement market. A spokesman for the Scots firm said that while it believed Fortigel – set to be marketed as Fortesta by Endo – had huge potential there, its own US sales will focus on oncology treatments.

ProStrakan launched its US business last November after Sancuso, a skin patch to prevent nausea in chemotherapy patients, was approved.

Wilson Totten, ProStrakan's chief executive, said Endo could maximise the drug's potential in the US and allow his company to reap the commercial returns.

ProStrakan has already signed 38 outlicensing deals around the world, although the Endo deal is the largest.

Shares in the group rose 12 per cent to 148.75p.

The company said it would use half of the up-front payment to pay down part of a 50m debt facility it signed in 2007, and agreed to draw no more on this.

None of the facility was due to be repaid until the end of 2010.