Ranbaxy Laboratories Ltd has got the US Food and Drug Administration (FDA) approval to launch acne drug Absorica in the US market.
Absorica is a patented brand formulation of acne medication isotretinoin, developed by Cipher.
Through a business agreement with the Canadian firm – Cipher Pharmaceuticals Inc – Ranbaxy Laboratories Inc (RLI), a wholly owned subsidiary of Ranbaxy Laboratories Ltd, is expected to launch Absorica in the fourth quarter, the company said on Monday.
The approval of Absorica is through the collaboration of Cipher and its partner, Galephar Pharmaceutical Research, said Mr Larry Andrews, President and Chief Executive of Cipher.
According to the agreement, Ranbaxy will pay royalties on net sales to Cipher.
“As a result of the FDA approval of Absorica, Cipher will receive a $9 million milestone from Ranbaxy, approximately $4.5 million of which will be shared with Galephar. This milestone will be reflected in Cipher's cash balance at the end of Q2 2012. Going forward, Cipher will also receive royalties on net US sales and is eligible for future milestone payments based on sales targets. Under the agreement with Ranbaxy, Cipher is responsible for product supply and manufacturing,” Cipher added.
“Absorica is a milestone in our commitment to serve the dermatology community and will be the flagship brand for Ranbaxy's specialised dermatology sales force,” Mr Venkat Krishnan, Senior Vice- President and Regional Director, Americas, Ranbaxy, said in a company statement.