QRxPharma to form US sales partnership

Pain drug developer QRxPharma (ASX:QRX) has arranged an alliance to commercialise its debut formulation, MoxDuo, in the US.

The company has signed a letter of intent to forge a partnership with Actavis, in advance of a planned launch of MoxDuo in the market in calendar Q3 2012.

MoxDuo is a 3:2 ratio combination of morphine and oxycodone which promises to deliver the same results with fewer side-effects than either of the two opioids alone. It is based on IP developed by the University of Queensland.

Under the proposed terms of the partnership, Actavis will gain exclusive rights to commercialise MoxDuo in the US market, assuming all launch, marketing and sales costs.

In return, QRxPharma will receive royalties of 50% on the first $150 million in cumulative sales, then between 10% to 30%, depending on sales, in the future.

Despite the exclusivity, QRxPharma will be entitled to start selling MoxDuo directly in the US starting from 12 months after its launch in the market. But the agreement will only entitle it to provide up to 25% of effective sales efforts.

QRxPharma will also retain all rights to the product outside of the US market.

Bell Potter Securities earlier this month nominated QRxPharma as one of five Australian biotech companies most likely to secure partnership deals in 2012.

QRxPharma (ASX:QRX) shares spiked nearly 14% to $1.355 in heavy trading on Wednesday on the back of the announcement.