Dong-A Pharmaceutical Co exports erectile dysfunction drug to Russia

Dong-A Pharm-tech, a subsidiary of South Korean pharmaceutical company Dong-A Pharmaceutical Co., has entered into a five-year, US$50m (Euro 35.2m) contract with Otechestvennye Lekarstva OJSC to market Zydena, Dong-A's erectile dysfunction drug, in Russia.

Under the terms of the agreement, Otechestvennye Lekarstva OJSC, one of the largest Russian pharmaceutical firms, will pay both upfront fees and running royalty on sales for the life of the contract. Expectations are that revenue could reach $100m (€70.3 m).

This agreement represents the second significant licensing arrangement for Dong-A, Korea's largest pharmaceutical company; a year ago it signed a contract with SCP Corp, of Saudi Arabia, for marketing Zydena in Gulf Cooperation Council territories. Expansion into Russia and the Middle East represents a significant milestone in Dong-A's strategic plan to turn the company into a world class, r&d driven drug company.

Dong-A expects that sales of Zydena in Korea will represent in excess of 20% of the erectile dysfunction drug market there in 2007, its second year on the market. The company aims to increase global marketability of Zydena by developing the product for use in new indications such as pulmonary arterial hypertension and benign prostatic hyperplasia, given its favourable half-life and once-a-day duration.

"This deal positions Zydena for solid sales in the rapidly evolving pharmaceutical market in Eastern Europe and furthers our strategy for marketing Zydena in numerous key countries in Asia and South America in advance of our entry into North America and the European Union," said Dong Hyun Park, president of Dong-A Pharm-tech. "Based on success in the Russian market, we may accelerate our expansion into bigger markets such as the US, Europe and Japan by 2009, when we expect the FDA Clinical Phase III studies to be completed."