May 28, 2012 / 11:11 AM / in 6 years

UPDATE 2-Ranbaxy gets U.S. OK for acne treatment

* Ranbaxy sees U.S. launch of Absorica in Q4

* Cipher, Galephar Pharma to get $9 mln milestone fee

* Cipher to draw royalty on sales from Ranbaxy

* Cipher shares jump 58 pct to a 4-year high on TSX

May 28 (Reuters) - Indian group Ranbaxy Laboratories has received U.S. approval for acne treatment drug Absorica and expects a U.S. launch in the fourth quarter of this year.

Ranbaxy holds the U.S. marketing rights for the drug, which was jointly developed by Cipher Pharmaceuticals Inc and Galephar Pharmaceutical Research.

Shares of Cipher, which has a market value of about C$30.5 million, jumped 58 percent to a four-year high of C$1.98 on Monday on the Toronto Stock Exchange.

Cipher will independently commercialize the drug in Canada, CEO Larry Andrews said by phone.

“We are expecting to hear back (from Canadian regulators) either in late fourth quarter or early first quarter of 2013,” Andrews said.

Cipher will receive a $9 million milestone payment from Ranbaxy, half of which will be shared with Galephar, the Canadian company said.

Cipher will also get a royalty on net sales from Ranbaxy - majority owned by Japanese company Daiichi Sankyo.

Absorica will be the flagship brand for Ranbaxy’s specialized dermatology sales force, said Venkat Krishnan, senior vice president, Ranbaxy for America region.

The U.S. acne treatment market was worth about $400 million in 2011.

“The revenue we expect from Absorica will be greater than the revenue from our existing two products,” Andrews said.

Cipher earned C$1.4 million ($1.37 million) revenue from Lipofen, a drug used to manage cholesterol, in the first quarter. Revenue from ConZipa, used to treat chronic pain in adults, was about C$300,000 in the period.

Shares of Ranbaxy Laboratories, which is valued at $4 billion, closed down 0.9 percent at 525.20 Indian rupees in a firm Mumbai market.

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