US-based pharmaceutical firm Vivus has signed a licensing agreement with Auxilium Pharmaceuticals, involving Auxilium marketing its Stendra (avanafil) drug in the US and Canada for treatment of patients with erectile dysfunction (ED).

Simultaneously both the firms have also signed a commercial supply agreement, under which Vivus will be responsible for manufacturing and delivery of the drug to Auxilium.

In addition, Vivus will be responsible for the product’s post-approval requirements in the US, including a potential label amendment based on the results of the TA-501 study designed to assess the efficacy of Stendra in approximately 15 minutes.

As part of the licensing deal, Vivus will receive about $300m based on achievement of certain sales targets, including a one-time licence fee of $30m and a $15m payment contingent upon a potential label amendment regarding onset-of-action as well as royalties on product sales.

Auxilium president and chief executive officer Adrian Adams said: "The rapid onset of action of Stendra and its favourable side-effect profile make it an exciting new entrant into the category."

"The rapid onset of action of Stendra and its favourable side-effect profile make it an exciting new entrant into the category."

Auxilium intends to start the commercial launch of Stendra, a US Food and Drug Administration (FDA) approved oral therapy, by the end of 2013, with its first shipments in December 2013, followed by promotional activities in early January 2014.

The Stendra promotion will largely be conducted by Auxilium’s Primera sales force comprising 150 representatives currently engaged in strategic targeting of urologists, endocrinologists, and certain high prescribing primary care physicians.

Stendra, an phosphodiesterase inhibitor administered orally, will be available through retail and mail order pharmacies.

Avanafil, which is called Spedra in the European Union (EU), is also approved by the European Medicines Agency (EMA) for the treatment of ED in the EU.

Menarini via its subsidiary Berlin-Chemie had secured exclusive licence from Vivus to commercialise and market Spedra in over 40 European countries as well as in Australia and New Zealand.

Vivus senior vice-president of finance and global commercial development, chief financial officer Timothy Morris said: "The agreement with Auxilium in the US and Canada, along with the previously-announced license agreement with Menarini for Europe and abroad, fulfills significantly our objective of monetising avanafil."

According to the company, both deals combined have the potential to generate over $95m in cash to Vivus within the first year, in addition to royalties earned on sales of the drug.

Vivus has acquired worldwide development and commercial rights to avanafil from Mitsubishi Tanabe Pharma Corporation for the treatment of sexual dysfunction, with the exception of certain Asian-Pacific Rim countries.

The company is currently in discussions with other firms for the marketing rights to its remaining territories.