|Covidien Announces License Agreement with Nuvo Research Inc.|
|Goal to Expand Covidien's Entry into Branded Pain Management Market
ST. LOUIS--(BUSINESS WIRE)--Jun. 16, 2009-- Covidien (NYSE:COV), a leading global provider of healthcare products, today announced that its Pharmaceutical Products business unit has entered into a license and development collaboration with Nuvo Research Inc. (TSX:NRI), a Canadian drug development company. The agreement is aimed at expanding Covidien's entry into the branded pain management market.
Covidien is the largest supplier of controlled pain medications in the United States based on number of prescriptions. Nuvo develops transdermal and topical therapeutic products designed to reduce side effects.
The companies' collaboration encompasses two topical formulations of diclofenac, a non-steroidal anti-inflammatory drug (NSAID), the first of which is currently under U.S. Food and Drug Administration (FDA) review. In February 2009, the FDA accepted Nuvo's resubmission of its application for approval of the first formulation as a complete response to a December 28, 2006, approvable letter from the FDA. The FDA is scheduled to advise Nuvo of its decision on the application by August 5, 2009. The second formulation is currently in development.
The first topical formulation combines a transdermal carrier, dimethyl sulfoxide, with diclofenac sodium, a leading NSAID. It is the subject of a research article appearing in the June 2009, edition of PAIN, the journal published by the International Association for the Study of Pain.
Under the license agreement between Nuvo and Mallinckrodt, Inc., a subsidiary of Covidien, Nuvo will receive a one-time upfront payment and could receive additional development and sales milestone payments over the next several years. The one-time upfront payment will be expensed in Covidien's fiscal third quarter. In addition, Covidien will pay Nuvo a royalty on sales of products developed and commercialized under this license agreement. Covidien anticipates launch of the first product from this agreement in the first half of calendar 2010.
Covidien will be responsible for all commercialization activities, including marketing, selling and medical education. Nuvo will own and maintain the intellectual property and will be responsible for manufacturing.
"Building on more than a century of pain treatment experience, Covidien focuses on providing patients with access to advanced medications that expand the limits of pain therapy by combining proven drugs with innovative delivery systems. We are pleased to be collaborating with Nuvo Research on topical formulations of diclofenac and the opportunity to expand our branded pharmaceutical portfolio," said Timothy R. Wright, President, Pharmaceutical Products and Imaging Solutions, Covidien. "While we face difficult comparisons in 2010 in our Pharmaceutical business, we are excited about the potential of these products to accelerate our performance in 2011 and beyond."
Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in four segments: Medical Devices, Imaging Solutions, Pharmaceutical Products and Medical Supplies. With 2008 revenue of nearly $10 billion, Covidien has more than 41,000 employees worldwide in 59 countries, and its products are sold in over 140 countries. Please visit www.covidien.com to learn more about our business.
Any statements contained in this communication that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on our management's current beliefs and expectations, but are subject to a number of risks, uncertainties and changes in circumstances, which may cause actual results or Company actions to differ materially from what is expressed or implied by these statements. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, our ability to effectively introduce and market new products or keep pace with advances in technology, the reimbursement practices of a small number of large public and private insurers, cost-containment efforts of customers, purchasing groups, third-party payers and governmental organizations, intellectual property rights disputes, complex and costly regulation, including healthcare fraud and abuse regulations, manufacturing or supply chain problems or disruptions, rising commodity costs, recalls or safety alerts and negative publicity relating to Covidien or its products, product liability losses and other litigation liability, including legacy Tyco-related litigation, divestitures of some of our businesses or product lines, our ability to execute strategic acquisitions of, investments in or alliances with other companies and businesses, competition, risks associated with doing business outside of the United States, foreign currency exchange rates, issues related to our existing material weakness in accounting for income taxes or potential environmental liabilities. These and other factors are identified and described in more detail in our filings with the SEC. We disclaim any obligation to update these forward-looking statements other than as required by law.