Pozen (Nasdaq: POZN) has signed a licensing agreement with Xcel Pharmaceuticals for the commercialization of MT 300, the company’s injectable migraine treatment.

Under the terms of the agreement, San Diego-based Xcel will have exclusive rights in the United States to commercialize MT 300.

Xcel will pay Pozen an upfront fee of $2 million and potential milestone payments of up to $8 million due upon certain future regulatory approvals and the achievement of a predetermined sales threshold on MT 300.

MT 300 is being developed by Chapel Hill-based Pozen as an improved and highly purified formulation of dihydroergotamine mesylate (DHE) in a pre-filled syringe that is suitable for at-home use.

As previously announced, Pozen submitted a New Drug Application to the FDA for approval of MT 300 on Dec. 17, 2002. The application is currently under review.

Xcel also will pay Pozen royalties on combined sales of MT 300 and Xcel’s DHE 45 Injection, once MT 300 is commercialized. Xcel markets and sells DHE 45, which is packaged in glass ampoules, for the acute treatment of migraine.

Royalty rates on the combined annual net sales of MT 300 and DHE. 45 will commence in the low double-digits and increase based on the achievement of predetermined net sales thresholds.

“We believe MT 300 is a major step forward in providing migraine sufferers with a convenient injectable product and an improved formulation of DHE,” said John Plachetka, chairman, president, and chief executive officer of Pozen. “Xcel’s strong focus in migraine and dedicated neurology sales force make them the partner of choice to maximize the potential of MT 300. In addition, we created an innovative agreement, where we will receive royalties on the combined sales of MT 300 and D.H.E. 45, making it a win-win situation for both parties.”

In two Phase III trials involving over 1,200 migraine patients, Pozen says its MT 300 has demonstrated effectiveness in treating migraine pain. Data from each of the trials show a statistically significant improvement in the percentage of patients achieving pain relief at two hours as well as sustained pain relief when compared to placebo.

There are approximately 28 million people in the United States who suffer from migraine headaches. The injectable migraine market represented approximately $214 million in 2002 U.S. sales.

In addition to the licensing agreement with Xcel, Pozen has development and commercial alliances with GlaxoSmithKline for its MT 400 migraine treatment and with Nycomed for its MT 100 drug. The GSK deal has already generated a $25 million payment to Pozen.

Shareholders also have seen a return on their investments, as Pozen’s stock price has surged recently. Following a “strong buy” recommendation from Needham & Company, which initiated coverage last month, shares of POZN jumped 23 percent to a 52-week high of $15.

Since then, Pozen has set a new 52-week high of $17.96. Currently, the stock is down below it previous day’s close of $17, priced at $16.95 in early morning trading.

Pozen: www.pozen.com