Vitaros, currently approved in the Europe and Canada, is a topical cream for the treatment of erectile dysfunction (ED).
Under the deal, Apricus has exclusive rights to develop and commercialize the product in the US in exchange for a $1m upfront payment and a future $1.5m milestone payment.
After the US Food and Drug Administration’s acceptance of the new drug application, Allergan has a one-time opt-in right to take over the commercialization of the product.
If it decides to go ahead, Apricus will receive a total of $25m in upfront and milestone payments and double-digit royalties on net sales.
If Allergan elects against its opt-in right, Apricus will commercialize Vitaros and pay Allergan double-digit royalties on net sales. Allergan retains the right to launch a generic version of Vitaros in the future.
Apricus Biosciences CEO Richard Pascoe said: "This agreement creates a framework where both parties can leverage their respective strengths with the goal of bringing this novel topical treatment to the world’s largest ED market, which had sales of over $3 billion in 2014 according to IMS Health.
"Moreover, we believe that with Apricus’ broad Vitaros expertise and internal know-how, coupled with our proven success in obtaining regulatory approvals for Vitaros in other territories, we are well equipped to pursue regulatory approval for Vitaros in the U.S."