German pharmaceutical and chemicals company Bayer AG (BAY.XE) Thursday said it received approval from the U.S. Food and Drug Administration for marketing its drug Recothrom, previously known as rThrombin, in the U.S.
The drug, which is a form of human thrombin not derived from animal or human blood, is used as an aid to control bleeding during surgery.
Last year, Bayer bought a license to market the drug outside the U.S. from U.S. biotechnology company ZymoGenetics Inc. (ZGEN) for up to $198 million in one-time and milestone payments.
Bayer noted the FDA approval of the drug triggers a $40 million milestone payment from Bayer to ZymoGenetics. ZymoGenetics will compensate Bayer HealthCare for its U.S. sales efforts by paying a tiered commission of up to 20% on U.S. sales and up to $20 million in sales bonus payments upon achievement of certain U.S. sales levels during a three-year co-promotion period, Bayer added.
In the U.S., the drug will be jointly marketed by both companies for a period of three years, starting with the date of the marketing approval.
According to independent market estimates, the U.S. market volume for these kinds of drugs is expected to be around $250 million annually, with the market outside of the U.S. expected to be around the same size.
With the drug, the company hopes to fill its pipeline for the hematology and cardiology business, which has suffered after the German pharmaceutical company had to suspend the global marketing of its Trasylol drug, which has been linked to a higher risk of death.