GSK acquires rights to Santarus omeprazole products

Under the license agreement, GSK will be responsible for the development, manufacture and commercialization of licensed products in up to 114 countries, excluding the US, Europe, Australia, Japan and Canada. In addition, under a separate distribution agreement, GSK will distribute, market and sell Zegerid brand prescription products in Puerto Rico and the US Virgin Islands beginning in the first quarter of 2008. GSK will bear all costs for its activities under the license and distribution agreements.

GSK will pay Santarus an $11.5 million upfront fee and tiered double digit royalties, subject to reduction in certain circumstances, on net sales of any products sold under the license and distribution agreements. The term of the license agreement continues so long as GSK is obligated to pay royalties and the term of the distribution agreement continues as long as GSK sells the products, unless the agreements are terminated earlier by either GSK or Santarus under specified circumstances. GSK has an option to make a buy-out payment 20 years after the effective date of the agreements, after which time, GSK’s royalty obligations generally would end. To support GSK’s initial launch costs, Santarus will waive the first $2.5 million of aggregate royalties payable under the license and distribution agreements.

Gerald Proehl, president and CEO of Santarus, said: “We believe this relationship with GSK is a major advancement of our strategic objective to leverage our immediate-release proton pump inhibitor intellectual property in international markets and to further diversify our potential sources of future revenues.”