Last Updated: 2009-08-03 11:46:28 -0400 (Reuters Health)
Shares of Transcept Pharmaceuticals Inc jumped as much as 80 percent Monday, a day after the company signed a licensing deal with private firm Purdue Pharmaceutical LP on its experimental sleep drug Intermezzo.
Shares of the company touched a high of $10.49 early in the session, making them the highest percentage gainer on Nasdaq.
Under the terms of the deal, Transcept will receive an upfront payment of $25 million, and an additional $90 million in milestone payments.
Purdue will pay double-digit royalties ranging up to the mid-twenty percent level on U.S. net sales of Intermezzo—a potential sleep aid specifically for use in the middle of the night.
Intermezzo is a low dose formulation of the active agent most commonly prescribed in the United States for the treatment of insomnia, zolpidem.
In June, the company had been informed by the U.S. Food and Drug Administration that the review period of the drug would be extended by three months, after requesting additional data.
The company would get an additional payment of up to $30 million from Purdue based upon the timing of an FDA approval for Intermezzo.
The FDA set Oct. 30 as its action date on the drug.
Shares of the company were trading up about $4 at $9.76 Monday. They had closed at $5.80 Friday on Nasdaq. (Reporting by Vidya L Nathan in Bangalore; Editing by Aradhana Aravindan)