Endo Pharmaceuticals (ENDP) signed an agreement with UK-based ProStrakan Group Plc to acquire exclusive rights to commercialize Fortesta in the U.S., where the product is currently under Food and Drug Administration (FDA) review.

Fortesta is a 2% testosterone transdermal gel for testosterone replacement therapy in male hypogonadism. The product uses a metered dose delivery system for adjustment of dosage according to individual needs. Fortesta is already available in Europe.

Under terms of the deal, Endo will make an upfront payment of $10 million to ProStrakan and another $40 million by the end of 2010 on achievement of regulatory and commercial milestones. Endo has also agreed to pay an additional $160 million on realization of certain sales targets. ProStrakan will supply Fortesta to Endo in the U.S. for an undisclosed supply price.

This deal makes sense for Endo as it is building its urology and endocrinology portfolio. The company’s injectable testosterone product, Nebido, is currently under FDA review.

Hypogonadism, or low testosterone, is a common yet largely under-recognized and under-treated condition. It is estimated that about 13.8 million American men have testosterone levels which are below normal. However, only about 9% of these men are treated with testosterone replacement therapy.

Once launched, Fortesta and Nebido will face competition from Auxilium Pharma’s (AUXL) Testim and Solvay Pharmaceuticals’ AndroGel.

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