Auxilium Pharmaceuticals said today it will exclusively market Vivus’ erectile dysfunction (ED) drug Stendra™ (avanafil) in the U.S. and Canada, in a licensing deal that could generate up to $300 million for Vivus.

Auxilium agreed to pay Vivus $30 million up front, plus a $15 million milestone payment if the FDA allows Stendra to add a claim to its label that the drug has its onset of efficacy within 15 minutes or less. Auxilium also agreed to pay Vivus up to $255 million in additional payments based on achieving undisclosed sales milestones, as well as potential royalties on product sales.

The companies also agreed that Vivus will be initially responsible for manufacturing and supplying Stendra to Auxilium.

Auxilium said it expects to launch Stendra commercially by year’s end. The first shipments are set to reach stores in December 2013, followed in January 2014 by promotional activities by its Primera sales force, consisting of 150 representatives now devoted to strategic targeting of urologists, endocrinologists, and certain high-prescribing primary care physicians.

“We believe Stendra complements our current portfolio of testosterone replacement therapy and ED products, further broadening our men’s healthcare franchise in a very large market segment consisting of patients that tend to switch among products,” Adrian Adams, Auxilium’s CEO and president, said in a statement.

Stendra is a phosphodiesterase-5 inhibitor (PDE5-i) that can be taken 30 minutes before sexual activity. The once-daily drug can be taken without regard to food and has modest alcohol consumption requirements.

Vivus retains commercial rights to Stendra outside the United States and Canada, while continuing to oversee product’s development and regulatory approval in the United States. Vivus intends to market and sell Stendra under the trade name Spedra™ in the European Union, Australia, and New Zealand through an agreement with Menarini and its wholly owned subsidiary Berlin-Chemie. Vivus said in July it expected the Menarini deal to generate up to €79 million ($107.2 million) plus royalties over the life of the deal. Vivus has separately agreed to supply Menarini with supplies of Stendra until Dec. 31, 2018.

Vivus in turn licenses Stendra from Mitsubishi Tanabe Pharma Corporation (MTPC), under a January 2001 exclusive licensing pact for products containing avanafil outside of Japan, North Korea, South Korea, China, Taiwan, Singapore, Indonesia, Malaysia, Thailand, Vietnam, and the Philippines. In return, Vivus granted MTPC predecessor Tanabe an exclusive, royalty-free license within those countries for Vivus-developed oral products containing avanafil. Through Dec. 31, 2012, according to Vivus’ 10-K annual SEC filing, Vivus paid MTPC a total of $13 million, while purchasing from MTPC $7.4 million of inventory in preparation for the drug’s commercial launch in the United States and territories using the U.S. approval.

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