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ELAN LICENSING TRANSDERMAL NICOTINE PATCH WORLDWIDE RIGHTS

Executive Summary

ELAN LICENSING TRANSDERMAL NICOTINE PATCH WORLDWIDE RIGHTS to "a major U.S. multinational pharmaceutical corporation," the Irish firm announced May 5. "This product represents an instance in which Elan developed a product of its own choosing to capitalize upon a unique market opportunity," the release states. "Until recently, we developed important drug reformulations under client-funded research projects." Elan said it plans to begin clinical testing in Ireland "shortly" and that its licensing partner would likely initiate clinical trials in the U.S. Under the agreement, Elan retains the rights to market the once-a-day smoking cessation product in Ireland and Southeast Asia. "Management anticipates that royalties and manufacturing fees it will receive under the licensing arrangement will have a significant impact on Elan's future revenues," Elan Chairman Donald Panoz said. "Marketing studies by our licensee and provided to us indicate that a transdermal nicotine patch which successfully meets certain performance specifications . . . would have a major impact on the worldwide smoking cessation market." The patch product, which employs Elan's proprietary Dermaflex and Panoderm transdermal technology, maintains regular levels of nicotine in the blood and thereby eliminates the need to smoke a cigarette, according to the release. "By employing a succession of lower strength nicotine patches over several weeks or months," Elan explained, "the nicotine level in the blood is gradually lowered, thus reducing nicotine dependency." When approved in the U.S., the product will compete with Merrell Dow's Nicorette. Approved in 1984, Nicorette had retail sales of $34 mil. (at pharmacy acquisition cost) in 10 months on the market, according to the Rx audit firm Pharmaceutical Data Services. Elan's current licensing agreements with U.S. firms include arrangements with Pfizer and Riker, covering sustained release formulations of nifedipine and theophylline, respectively.
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