UPDATE 1-Covidien gains U.S. rights to Nuvo pain medicines

* Covidien gains rights to Pennsaid

* Nuvo gets $10 mln payment up front

NEW YORK, June 16 (Reuters) - Medical products maker Covidien Plc (COV.N) will license rights to two Nuvo Research Inc (NRI.TO) topical anti-inflammatory medicines as it expands into the branded pain market, the companies said on Tuesday.

Covidien gains rights to sell Pennsaid, a cream version of the older pain medicine diclofenac which U.S. regulators are reviewing, and a follow-on product in development. The U.S. Food and Drug Administration is expected to respond to the Pennsaid application by Aug. 5.

Nuvo said it will receive $10 million up front from Covidien and $15 million or $20 million for FDA approval of Pennsaid, depending on the drug's labeling. It could receive up to $100 million more should the two drugs reach various sales milestones.

Covidien is the largest U.S. supplier of controlled pain medications, based on number of prescriptions, but those have all been generics. (Reporting by Lewis Krauskopf; Editing by Derek Caney)