(Refiles to correct typo in company name in second paragraph)
* Cadence to pay $3.5 mln as upfront option fee to Incline
* Cadence shares up 2 pct in extended-trade
June 21 (Reuters) - Cadence Pharmaceuticals Inc CADX.O said it entered into an option to acquire privately held Incline Therapeutics Inc to expand its product pipeline, sending Cadence shares up 2 percent.
Under the deal, Cadence may acquire Incline for an amount not exceeding $135 million before commencement of the second option period -- 12 months or the date on which Incline gets its second tranche of its Series A financing, whichever is earlier.
Incline is developing its needle-free system, Ionsys, to deliver painkillers following surgery, while Cadence is trying to get regulatory approval for its experimental pain injection, Ofirmev.
Incline also entered into an agreement to complete a $43 million Series A venture financing to fund the development of Ionsys.
During the second option period Cadence may exercise its option to acquire Incline for an amount not to exceed $228 million plus payment of an additional amount not to exceed $57 million, related to a certain milestone
Cadence will pay $3.5 million to Incline as upfront option fee. Cadence will need to pay a second $3.5 million fee upon the commencement of the second option if it does not exercise its option to acquire Incline.
Shares of the company were up 15 cents in after market trade. They closed at $6.87 Monday on Nasdaq.
For the alerts double-click [ID:nASA00GUB] . (Reporting by Anand Basu in Bangalore; Editing by Jarshad Kakkrakandy)