Santarus in-licenses novel type 2 diabetes drug for US market for upfront $5 million and 35%-40% royalties

Santarus (Nasdaq: SNTS) has entered into a distribution and license agreement with fellow USA-based companies S2 Therapeutics and VeroScience granting Santarus exclusive rights to manufacture and commercialize Cycloset (bromocriptine mesylate) tablets in the USA.

Cycloset is a prescription drug approved by the US Food and Drug Administration as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus - both as mono-therapy and in combination with other oral antidiabetic agents. Santarus expects to commercially launch Cycloset November 2010.

Under the terms of the deal, Santarus is paying an upfront fee of $5 million to S2 Therapeutics and VeroScience. Santarus will record all sales of Cycloset and will pay a product royalty to the two companies of 35% of the gross margin associated with net sales of the drug up to $100 million of cumulative total gross margin, increasing to 40% thereafter. Gross margin is defined as net sales less cost of goods sold.