Apricus launches Virirec in Spain to treat erectile dysfunction

Virirec, Apricus’ novel topical on-demand treatment for erectile dysfunction ("ED") is also marketed in other European countries as Vitaros and in Belgium as Vytaros.

This is the fifth territory in the European Union (the "EU") in which the product has been launched following successful launches by Apricus’ partners, Takeda in the United Kingdom (the "UK") and Sandoz in Germany, Sweden and Belgium. The product is currently approved in ten countries in Europe, including additional major ED markets such as France and Italy.

Richard Pascoe, Chief Executive Officer of Apricus, commented, "We are pleased to announce the launch of Virirec, our novel on-demand topical cream for the treatment of ED, by our partner Recordati in Spain. Spain is one of the largest ED markets in Europe with sales of approximately $85m last year. Moreover, with Recordati’s launch in Spain, coupled with expected launches in additional markets in Europe later this year by Laboratories Majorelle and Bracco, we expect that Vitaros use will continue to expand in the large and growing untreated ED patient population."

In February 2014, Apricus signed an exclusive license agreement with Recordati (Bloomberg REC IM) to market Vitaros in Spain, Russia, Turkey, Ireland and certain other European and African countries (the "Territory") and received an upfront payment of $2.5m.

Under the terms of the agreement and based on the OANDA exchange rate as of April 30, 2015, Apricus is eligible to receive up to approximately $38.5m from Recordati in additional milestones, plus double-digit tiered royalties based on Recordati’s net sales of the product in the Territory. In exchange, Recordati has the exclusive right to commercialize Virirec in the Territory.

Vitaros is an exciting new entrant into the ED treatment market, offering a range of benefits that make it appealing for virtually any ED patient. Vitaros is a topical ED cream that delivers rapid onset (generally 5-15 minutes), treatment duration of approximately 1 hour and a favorable safety profile.

Vitaros’ local delivery provides an attractive alternative for all patients, but particularly those with complications that preclude them from using the orally delivered systemic treatments or who prefer to not use the injectable forms of alprostadil.

According to IMS Health, the global ED market in 2013 was in excess of $5.5 billion annually. Based on the OANDA exchange rate as of April 30, 2015, Vitaros has the potential to generate for Apricus over $160 million in future milestone payments, as well as additional potential royalty revenue on net product sales based upon double-digit royalty rates through its existing commercial partnerships.

In addition, Apricus intends to leverage Vitaros through additional licensing efforts in key markets in Asia and throughout Latin America.