* Deal includes $60 mln upfront, $90 mln milestone payments
* Salix to fund Relistor development outside Japan
* To get royalties, sales milestones up to $200 mln
* Shares up 11 pct (Adds analyst comment, background; updates share movement)
By Vidya L Nathan
BANGALORE, Feb 7 (Reuters) - Progenics Pharmaceuticals Inc PGNX.0 sold the rights for its constipation shot Relistor to Salix Pharmaceuticals Ltd SLXP.O within two months of former partner Pfizer Inc (PFE.N) returning it.
Shares of the Tarrytown, New York-based company, which have risen 16 percent since Pfizer returned the rights on Dec. 10, were up 11 percent in morning trade on the Nasdaq.
The deal, which does not include rights for the product in Japan, consists of $60 million in upfront payments and $90 million in milestone payments in exchange for rights on the injection that treats opioid induced constipation.
"(The deal) is good for Progenics because they needed a commercial partner and Pfizer was not paying them any royalties at this point. It was important for them to get re-established commercially with Relistor," said Needham & Co's Alan Carr.
Rights to the product, which has been approved in the United States, Canada and the European Union, was returned from Progenics' former partner Wyeth -- now a unit of Pfizer.
In 2005, Progenics had licensed Relistor to Wyeth, for upfront payment of $60 million.
Progenics will also get sales-based milestones of up to $200 million plus royalties on product sales in the United States, as well as 60 percent of all revenue received from non-U.S. sublicensees.
The companies said Relistor, which has been licensed to Ono Pharmaceuticals in Japan, booked about $16 million in worldwide sales for 2010.
The companies expect Salix to take over the funding of Relistor's development and marketing from Pfizer in April. (Reporting by Vidya L Nathan in BANGALORE, additional reporting by Rajarshi Basu; Editing by Jarshad Kakkrakandy)