Q-Med, Smith & Nephew form new alliance to research osteoarthritis treatment

By E. Janene Geiss

Philadelphia, June 28 - Q-Med AB and Smith & Nephew Orthopedics Trauma & Clinical Therapies said Wednesday that they have formed a strategic alliance to develop and commercialize Q-Med's proprietary technology for the production of stabilized non-animal hyaluronic acid, Nasha, for orthopedic uses.

Under the agreements, the major financial component will be royalties on product sales worldwide.

The royalty rate will vary depending on the commercial conditions in the markets in which Smith & Nephew will promote the products, officials said.

In addition to royalty payments, Q-Med said it has received an upfront payment of $10 million and will receive four additional milestone payments, which could total $60 million related to the U.S. approval and commercialization of Durolane.

The purpose of the transaction is to explore Q-Med's versatile technology for the management of osteoarthritis in joints and to explore other orthopedic uses and diseases, according to a company news release.

The two companies have entered into a licensing and supply agreement under which Q-Med said it has granted Smith & Nephew the global exclusive right to market, sell and distribute Durolane and other products intended for the management of orthopedic conditions and diseases.

Q-Med said it will manufacture and supply all products developed under this transaction.

Smith & Nephew said it will finance and focus on clinical development, registration and commercialization of new products worldwide.

Durolane has been approved for the treatment of osteoarthritis in the knee in Europe since 2001, and for the treatment of osteoarthritis in both the knee and hip in Europe and Canada since 2004. More than 100,000 patients have been treated with Durolane.

Q-Med said it submitted a Pre-Market Approval application to the Food and Drug Administration in March.

Smith & Nephew is a London medical technology company.

Q-Med is an Uppsala, Sweden, biotechnology and medical device company

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