BioDelivery Services’ proposed product to treat severe cancer pain has yet to win Food and Drug Administration approval, but it is already producing big returns for the Triangle-based firm.

BDSI (Nasdaq: ) said Wednesday it had signed a contract worth $60 million plus royalties for its BEMA Fentanyl product to European drug firm Meda. Meda, which is based in Sweden, already owned European rights to the pain treatment.

The news sent BDSI shares up 8 percent, or 31 cents, to $4.31 in late-morning training.

BDSI will receive $30 million up front and another $30 million when the FDA approves the new-drug application (NDA) for BEMA. BDSI also will receive double-digit royalties.

BEMA Fentanyl combines a powerful narcotic with BDSI’s proprietary means of delivering the drug orally through a dissolvable disk.

BDSI anticipates launching the drug next year.

“BEMA Fentanyl represents a huge opportunity for us in the U.S.," said Anders Lonner, Meda’s chief executive officer.

"Our ambition with this unique product within the breakthrough cancer pain indication is to reach well over USD 200 million in yearly sales," he added. "Our US marketing organisation has good experience in the pain area and is well acquainted with the target group. Pain is a priority therapy area and with this deal we now add a significant potential for Meda in the US market."

Meda will be responsible for the clinical development of BEMA Fentanyl once the NDA is approved, according to the companies.

BDSI is scheduled to receive an additional $30 million when certain sales milestones are hit.

BDSI and Meda are targeting a market valued at nearly $700 million in 2006.

The companies also said they would work together to expand the use of BEMA Fentanyl. Meda will fund the development and have first refusal rights on commercialization.

“This is a landmark event for BDSI, and based on our standing relationship with Meda in Europe, we believe Meda is going to be a terrific marketing partner for BEMA Fentanyl here in the U.S.” said Mark Sirgo, BDSI’s chief executive officer.