NEW YORK (AP) — Shares of Transcept Pharmaceuticals Inc. rocketed Monday after the company said it licensed its insomnia treatment candidate Intermezzo to Purdue Pharmaceutical Products LP for up to $145 million, plus royalty payments. The agreement gives Purdue the exclusive right to sell the drug in the U.S. and negotiate for its approval in Canada and Mexico. Transcept retains the rights to the drug in all other countries, and it has the option to co-promote Intermezzo to psychiatrists in the U.S. In morning trading, shares of Richmond, Calif.-based Transcept jumped $3.75, or 64.7 percent, to $9.55. Earlier, they set a high of $10.49. The stock began trading in February and had ranged between $2.56 and $6.36. Intermezzo is intended to be taken in the middle of the night by people who wake up and then have difficulty getting back to sleep. Transcept said it could be the first prescription sleep aid approved for that purpose. The active ingredient in Intermezzo is zolpidem, which is also the main component of insomnia drugs like Ambien. Transcept said Intermezzo has only about one-third to one-quarter as much of the ingredient as other sleep aids. Under the agreement, Purdue will pay Transcept $25 million upfront, and up to $30 million more based on timing of approval by the Food and Drug Administration. Transcept could get up to $90 million more based on future milestones related to intellectual property and sales milestones. The deal also includes royalties of greater than 10 percent and as much as about 25 percent for Transcept. If Transcept exercises the psychiatric co-promotion option, it will receive an additional double-digit royalty on those sales. Transcept can begin co-promotion as soon as one year after launch. The FDA is scheduled to make a ruling on Intermezzo by Oct. 30.
