UPDATE 2-Paladin plans distribution deal with ProStrakan

Thu Dec 16, 2010 10:24am EST

* To distribute drugs in Canada, Latam, Africa, Israel

* Paladin to acquire ProStrakan's secured debt facility

* Paladin gets right to license new ProStrakan products

* Paladin CEO to join ProStrakan's board

* Paladin shares up 4 pct (Rewrites; adds details)

Dec 16 (Reuters) - Canadian specialty pharmaceutical company Paladin Labs PLB.TO plans to enter into a licensing and distribution agreement with ProStrakan PSK.L to distribute the British drugmaker's products in certain emerging markets.

The agreement includes distribution rights for ProStrakan's Rectogesic, for the treatment of chronic anal fissure pain; Xomolix, used for post-operative nausea and vomiting; and Tostrana, used in testosterone deficiency patients.

Paladin will have the right to distribute the drugs in regions including Canada, Latin America, sub-Saharan Africa and Israel.

Paladin, which already has a deal to distribute certain ProStrakan brands in Canada, will also acquire ProStrakan's existing secured debt facility with certain conversion rights.

The 50 million pounds ($77.8 million) facility will be amended and provided by Paladin in Canadian dollars at a rate of interest of 10.5 percent.

During the term of the debt facility, Paladin will have the right to license any new products acquired or licensed by ProStrakan for the same regions and on the same terms and conditions.

Terms of the license agreement were not disclosed.

Paladin also said its chief executive, Jonathan Goodman, will join ProStrakan's board on completion of the transaction.

Paladin, known for its Plan B emergency contraceptive, also holds the licensing and marketing rights to Teva Pharmaceutical Industries Ltd's TEVA.O oral contraceptive Seasonique in Canada.

Shares of Paladin were trading up 4 percent at C$34.75, its highest ever, on Wednesday on the Toronto Stock Exchange. ($1=.6431 POUND) (Reporting by Esha Dey and Aftab Ahmed in Bangalore; Editing by Jarshad Kakkrakandy) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))

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