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Reckitt Benckiser to develop XenoPort alcohol abuse drug

(Adds details on drug, background on Reckitt Benckiser unit)

LONDON, May 15 (Reuters) - Reckitt Benckiser Group's pharmaceuticals unit will develop and sell XenoPort Inc's drug to treat alcoholism, the companies said on Thursday.

The drug, called arbaclofen placarbil, will complement Reckitt's heroin addiction treatment Suboxone, whose sales are falling due to intense competition from cheaper generic versions.

Reckitt plans to advance the new drug into a Phase IIB proof-of-concept study for the treatment of alcohol use disorders, a condition it says affects more than 140 million people worldwide. The drug will be tested for its ability to suppress alcohol cravings, reduce intake and facilitate maintenance of abstinence in alcohol dependent people.

Reckitt, which is better known for consumer products such as Durex condoms and Dettol disinfectants, is currently considering strategic options for its pharmaceuticals unit. Last month, the company signaled it was leaning toward spinning it off into a separate company.

Under the terms of the exclusive global licensing deal, XenoPort is entitled to $20 million up front, followed by another $5 million upon the transfer of certain technology and materials and aggregate payments of up to $70 million upon Reckitt's achievement of development and regulatory milestones, and $50 million for commercial milestones.

(Reporting by Martinne Geller; Editing by Erica Billingham and Sophie Walker)