June 11, 2009 (FinancialWire) — Penwest Pharmaceuticals Co. (NASDAQ: PPCO), Endo Pharmaceuticals (NASDAQ: ENDP) and Valeant Pharmaceuticals (NYSE: VRX) announced that Endo has signed an exclusive license with Valeant allowing it to market Opana ER in Canada, Australia and New Zealand. Opana ER, the extended release formulation of oxymorphone, was jointly developed by Penwest and Endo.

This agreement is the first one resulting from the collaborative work Penwest and Endo began late last year to license Opana ER in territories outside the U.S. Under the terms of the collaboration agreement between Penwest and Endo, the two companies have agreed to share equally in the proceeds received from Valeant for Opana ER under the terms of the licensing agreement.

The agreement with Valeant also includes rights to Opana(r), the immediate release formulation of oxymorphone developed by Endo.

The terms of the licensing agreement call for a payment of CDN$2 million upfront and payments totaling up to CDN$1 million when certain sales milestones are reached in Canada and A$1.1 million when certain regulatory and sales milestones are met in Australia. In addition, Valeant has agreed to pay royalties ranging from 10% to 20% of net sales of the OPANA products in each of the three countries, subject to royalty reductions upon patent expiry or generic entry.

Demand for analgesic narcotics in Canada, a market that includes long-acting opioids, such as versions of oxycodone, morphine, fentanyl and hydromorphone, has been growing at double digit rates annually over the past several years. In 2008, analgesic narcotics in Canada represented approximately a CDN$400 million market.

Opana ER received FDA approval in June 2006, and is currently marketed by Endo as a treatment for moderate-to-severe pain in patients requiring continuous, around-the-clock opioid treatment for an extended period of time.

As recently reported by Endo, combined net sales for the Opana franchise increased 31 percent to $52.8 million for the first quarter 2009, compared with $40.3 million in the same period a year ago, while prescription volume for Opana ER and OPANA increased 58 percent in the first quarter 2009, compared with the first quarter of 2008.

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