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Apricus Shares Marginally Down on Vitaros Deal

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Apricus Biosciences, Inc.’s (APRI) shares inched down by 1.6% over the last trading session following the company’s announcement that it has entered into an exclusive licensing agreement with Recordati for the commercialization of Vitaros in Spain, Russia, Turkey, Ireland and some other countries in Europe and Africa.

Vitaros, the only approved product of Apricus, is an on-demand treatment with a topically applied cream formulation for treating patients suffering from erectile dysfunction (ED).

Per the agreement, Recordati will gain exclusive rights for the commercialization of Vitaros in the markets covered under the agreement. Recordati will pay Apricus up to $3.8 million in the form of upfront and pre-commercialization milestone payments. The cost of obtaining regulatory approvals will be borne by Recordati. Apricus will also receive royalties from Recordati based on Vitaros’ net sales in the territory and up to $47 million as sales milestone payments.

We note that Vitaros was approved for the treatment of ED in Canada in 2010. In June 2013, Vitaros received European approval through the European Decentralized Procedure (:DCP). Subsequently, the company has gained national phase approval for Vitaros in France, Germany, Ireland, Italy, the Netherlands, Sweden, the UK and Belgium.

The company has entered into partnerships with several companies for the commercialization of Vitaros. The company expects to launch the drug in different countries throughout 2014.

Meanwhile, Apricus is developing a second-generation Vitaros with a stabilized dosage formulation due to which the drug can be stored at room temperature. The company is also developing Femprox for the treatment of female sexual interest/arousal disorder (:FSIAD). We expect investor focus to remain on updates on Apricus’ pipeline.  

Apricus carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the pharmaceutical sector include Endocyte, Inc. (ECYT), Auxilium Pharmaceuticals Inc. (AUXL) and Forest Laboratories Inc. (FRX). All these stocks hold a Zacks Rank #1 (Strong Buy).

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