May 10, 2010 (FinancialWire) — Adeona Pharmaceuticals, Inc., (AMEX: AEN ) said that it has entered into a corporate partnership with Sweden-based Meda AB to develop flupirtine for the treatment of fibromyalgia syndrome.

According to Adeona, the deal contemplates the payment to Adeona of up to $17.5 million in upfront and milestone payments, plus royalties.

Under the terms of the agreement, Adeona has granted Meda an exclusive sublicense to all of Adeona's patents covering the use of flupirtine for fibromyalgia.

The patents have issued in the U.S. and are pending in Canada and Japan, according to Adeona.

Meda will assume all future development costs for the commercialization of flupirtine for fibromyalgia. Adeona received an up-front payment of $2.5 million and is entitled to milestone payments of $5 million upon filing of a New Drug Application with the Food and Drug Administration for flupirtine for fibromyalgia and $10 million upon marketing approval.

Adeona said it is also entitled under the deal to receive royalties of 7% of net sales of flupirtine approved for the treatment of fibromyalgia covered by issued patent claims in the Territory. Adeona will share such royalties equally with Adeona's university licensor.

Fibromyalgia is a chronic condition characterized by widespread pain and stiffness throughout the body, accompanied by severe fatigue, insomnia and mood symptoms. The condition affects an estimated 2-4% of the population worldwide, including an estimated four million patients in the United States.

There are presently three products approved for this indication in the U.S. — Lyrica, Cymbalta and Savella. Flupirtine is differentiated from these products in that it employs a unique mode of action, according to Adeona. Meda estimates the U.S. market for fibromyalgia to be near $1 billion at the time of potential launch of flupirtine.

Flupirtine is a first-in-class, novel type of central nervous system agent known as a selective neuronal potassium channel opener that also has NMDA receptor antagonist properties. Flupirtine is currently approved and marketed by Meda for the treatment of pain in various countries outside of the US.

Michigan-based Adeona is a pharmaceutical company developing new medicines for serious central nervous systems diseases. Adeona's primary strategy is to in-license clinical-stage drug candidates that have already demonstrated a certain level of clinical efficacy and develop them further to either commercialization or a development collaboration.

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