Nuvo, Covidien Sign Development Agreement

Nuvo has entered into a license and development agreement with Covidien, to market and sell Pennsaid, and its follow-on product, Pennsaid Plus, in the US.

Under the agreement, Nuvo will receive an up-front, non-refundable payment of $10 million.

Nuvo is also eligible to receive $15 million milestone payment on Pennsaid’s approval by the FDA, which will increase to $20 million if certain labeling criteria are agreed to, by the FDA.

Moreover, Nuvo will also receive royalties on net sales of Pennsaid and Pennsaid Plus at rates that are consistent with industry standards for products at similar stages of development.

Covidien will be responsible for all future development activities and expenses for Pennsaid Plus, including two phase-III clinical trials expected to start in 2010.

Nuvo will manufacture and supply Pennsaid and Pennsaid Plus to Covidien, from its manufacturing facility in Varennes, Québec.

Dan Chicoine, Chairman of Nuvo, said: “Covidien is an ideal partner with the infrastructure, market reach, resources and commitment to maximize the commercial potential of Pennsaid and Pennsaid Plus.”