UPDATE 2-Labopharm gets Canada nod for once-daily tramadol

(Adds company and analyst comments)

TORONTO, June 18 (Reuters) - Labopharm Inc. (DDS.TO) said on Monday it expects to begin selling its once-daily version of the generic painkiller tramadol in Canada later this year after receiving approval to do so from Health Canada, sending its shares up more than 15 percent.

Health Canada approved 100-milligram, 200-milligram and 300-milligram tablets of the once-daily version for sale.

The go-ahead comes a little more than two weeks after Labopharm said the U.S. Food and Drug Administration declined to approve its tramadol formulation until further conditions are met.

"It's certainly a good vindication and it's nice to have it in your home country," James Howard-Tripp, Labopharm's president and chief executive, told Reuters. "The Canadian regulatory authorities were a delight to work with."

Howard-Tripp said Labopharm is in talks to complete a licensing and distribution agreement for the drug, and will retain the right to co-promote the product to certain specialty markets through its own sales force.

"We had significant interest in the product. We have brought it down to a preferred partner and we're trying to close out the deal," he said. "We will then launch as rapidly as possible after that."

The announcement pushed the stock up 42 Canadian cents, or 13.8 percent, to C$3.47 by noon on Monday on the Toronto Stock Exchange after touching as high as C$3.61 earlier in the day.

But some analysts were cautious, noting that U.S. approval is still a significant roadblock that the company must overcome.

"This is definitely good news," said Laurence Terrisse-Rulleau, a biotechnology analyst at Blackmont Capital in Montreal. "Having said that, let's not forget that the big market is the U.S."

Terrisse-Rulleau said uncertainty will continue until the FDA rules on whether Labopharm will be required to conduct another Phase 3 trial.

"The big market is obviously the U.S. and I don't know what's going on there and what the FDA is going to ask," she said.

Earlier this month, the FDA said that Labopharm had failed to demonstrate the efficacy of its once-daily formulation of tramadol as the statistical methods used to analyze data from Labopharm's clinical trials did not adequately address missing data relating to subjects who dropped out of the trials.

The FDA did not outline in what way the company's statistical methods were inadequate.

Howard-Tripp said the company expects to meet with the FDA by the end of the month.

Once-daily tramadol, Labopharm's key product, has received regulatory approval in 22 European countries and commercial launch of the product across Europe is under way.

($1=$1.07 Canadian)