ZEGERID OTC approval triggers $20M milestone payment to Santarus

Dec 22 2009

Santarus, Inc. (NASDAQ:SNTS), a specialty biopharmaceutical company, today announced that it has received the $20 million milestone payment previously announced on December 1, 2009 relating to the approval of ZEGERID OTC^™ (omeprazole 20 mg/sodium bicarbonate 1100 mg capsules) under its over-the-counter (OTC) licensing agreement with Schering-Plough HealthCare Products, Inc., the consumer healthcare division of Merck & Co., Inc. Schering-Plough and Merck merged on November 3, 2009.

The U.S. Food and Drug Administration (FDA) approved Schering-Plough HealthCare Products’ New Drug Application (NDA) for ZEGERID OTC for OTC treatment of frequent heartburn on December 1, 2009. The OTC heartburn market in the U.S. is estimated at $1.7 billion based on data from Information Resources, Inc., a market research firm, and company estimates. ZEGERID OTC capsules are expected to be available on retail store shelves in the first half of 2010.

The NDA was submitted by Schering-Plough HealthCare Products under the terms of a license agreement for OTC proton pump inhibitor (PPI) products using Santarus’ proprietary technology. Santarus may be entitled to receive up to an additional $37.5 million in sales milestones. Santarus will also be entitled to a low double-digit royalty, subject to adjustment in certain circumstances, on net sales of any ZEGERID OTC products sold by Schering-Plough HealthCare Products under the license agreement. In turn, Santarus will be obligated to pay royalties to the University of Missouri on net sales of any such OTC products.

Santarus is continuing to manufacture, promote and sell its ZEGERID (omeprazole/sodium bicarbonate) prescription products in both 20 mg and 40 mg dosage strengths of omeprazole in the U.S. prescription market for PPI products. Approximately 96% of ZEGERID Capsules prescriptions are written for the 40 mg dosage strength. Prescription strength ZEGERID is indicated for the treatment of heartburn and other symptoms associated with gastroesophageal reflux disease (GERD), for the short-term treatment of erosive esophagitis diagnosed by endoscopy, for maintenance of healing of erosive esophagitis (controlled studies do not extend beyond 12 months), and for short-term treatment of active benign gastric ulcers and active duodenal ulcers.