Pozen shares rocketed upward more than 38 percent to $10.39 in mid-afternoon trading Wednesday.
The news follows Pozen's announcement Monday that it expects to respond by the end of the fourth quarter to safety questions regarding a migraine treatment it is developing with GlaxoSmithKline. Shares of Pozen (NYSE POZN) jumped more than 25 percent on that news.
Under the terms of the agreement with AstraZeneca, Pozen will receive $40 million up front for the development of the arthritis treatment and the filing of its New Drug Application with the Food and Drug Administration.
Pozen will also receive development and regulatory milestone payments that could total as much as $160 million, and potential sales performance milestones of $175 million.
Pozen will be responsible for the development work and regulatory filings associated with the drug in the United States, while AstraZeneca will have development and regulatory-filing responsibilities outside the U.S. AstraZeneca will also handle all aspects of manufacturing, marketing, sales and distribution on a worldwide basis.
The drug is targeted to begin phase III human trials in 2007, with Pozen expected to file the NDA for U.S. regulatory approval in 2008, AstraZeneca said.
The companies said their agreement is not yet final, pending regulatory clearances.
The new drug would be marketed as a pain reliever for patients suffering from pain and inflammation associated with osteoarthritis and rheumatoid arthritis. The treatment combines Pozen's anti-inflammatory drug naproxen with an ingredient in AstraZeneca's heartburn treatment Nexium.
Fran Barsky, director of investor relations, said the deal would not lead to significant hiring at Pozen because the 35-employee company outsources its manufacturing and clinical trials work.
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