BDSI, Endo announce license agreement for pain treatment

RALEIGH, N.C.—BioDelivery Sciences International, Inc.(BDSI), a specialty pharmaceutical company that specializes in pain managementand oncology supportive care, has announced the signing of a worldwide licenseand development agreement with Newark, DE-based Endo Pharmaceuticals for theexclusive rights to develop and commercialize BDSI's BEMA Buprenorphine for thetreatment of chronic pain. BDSI will receive an upfront payment of $30 millionfrom Endo for the license. If all milestones are met, theagreement could have a total worth of up to $180 million, including the upfrontpayment as well as $95 million in potential milestone payments based on theachievement previously established intellectual property, clinical developmentand regulatory events, and $55 million in potential sales milestones ifdesignated sales levels are reached. BDSI will also receive a tiered mid- toupper-teen royalty on U.S. net sales of BEMA Buprenorphine from Endo.

Per the terms of the agreement, Endo will assumeresponsibility for the manufacturing, distribution, marketing and sales of BEMABuprenorphine worldwide, and will commercialize the drug outside of the UnitedStates through its own efforts or regional partnerships. BDSI and Endo willcollaborate on the planning and finalization of the Phase III clinicaldevelopment program and regulatory strategy for BEMA Buprenorphine in theindication of chronic pain. For its part, BDSI will retain responsibility forconducting planned clinical studies leading up to the New Drug Applicationfiling, which Endo will be responsible for in addition to handling interactionswith the U.S. Food and Drug Administration.

"We could not be more pleased to enter into thissignificant partnership with a company that has the financial strength, marketpresence and focus in pain management as Endo," Dr. Mark A. Sirgo,President and Chief Executive Officer of BDSI, said in a press releaseregarding the deal. "As we considered the ideal commercial partner forBDSI's most significant asset, we sought to balance the financial benefits ofthe transaction with a company that had a real need for a product with thepotential of BEMA Buprenorphine along with solid experience and commitment tothe pain category. Endo is one of the most highly regarded and recognizedcompanies in the area of pain management, and they continue to demonstratetheir ability to excel in this category."

BEMA Buprenorphine uses BDSI's patented BioErodibleMucoAdhesive (BEMA) technology to deliver the opioid analgesic buprenorphine, apartial agonist of the mu-opioid receptor. The BEMA technology, according tothe company site, "consists of a small, bioerodible polymer film forapplication to the mucosal membranes (inner lining of cheek). BEMA films weredesigned to rapidly deliver a dose of drug across the mucous membranes for timesensitive conditions or to facilitate administration of drugs with poor oral(pill) absorption." The films are designed to dissolve completely within 15 to30 minutes. BDSI notes on its site that "With opioid analgesic sales exceeding$10 billion in 2010, we believe that BEMA Buprenorphine has the potential togenerate in excess of $500 million in annual sales."

"Endo is committed to serving as an integratedsolutions provider for the development and commercialization of productsfocused on the management of pain," Dave Holveck, President and ChiefExecutive Officer of Endo, said in the press release. "The addition ofBEMA Buprenorphine will broaden Endo's portfolio of pain therapeutics, allowingus to offer an integrated suite of products that currently includes Opana ER,Voltaren Gel and Lidoderm, as well as a broad range of generic pain products.We look forward to working closely with BDSI on the development of thisimportant asset."