Santarus, Glaxo Ink Zegerid Deal

Updated 12:25 p.m. EST

Shares of Santarus(SNTS Quote) climbed Monday after the specialty pharmaceutical company announced an agreement with GlaxoSmithKline(GSK Quote) to commercialize prescription and over-the-counter immediate-release heartburn reliever Zegerid.

It is the second Zegerid agreement for San Diego-based Santarus, which noted the impact of generic and competitive-pricing pressures earlier in the year.

British drugmaker Glaxo was the most likely company to partner with Santarus because of its history in prescription heartburn products, lack of presence today and its stated interest in adding to its worldwide portfolio, noted Rodman & Renshaw analyst Michael Higgins in a report Monday. He points out that Glaxo's venture capital arm vetted and contributed to Santarus' capital raising ahead of its 2004 IPO.

Monday's deal enables Glaxo to develop and commercialize Zegerid products, which are proprietary combinations of proton pump inhibitor (PPI) omeprazole and antacids, in a number of non-U.S. markets, including Africa, Asia (excluding Japan), the Middle East and Central and South America, and to distribute and sell it in the U.S Virgin Islands and Puerto Rico.

Santarus CEO Gerald Proehl said in a conference call Monday that the company expects sales in the U.S. Virgin Islands and Puerto Rico to begin as early as the first quarter of 2008 and anticipates it will launch in the next 12 months to 24 months in the other markets, first in the prescription form with the over-the-counter formulations following.