MSD to distribute and market Labopharm's Tradorec XL in the U.K.

Labopharm Inc. (TSX: DDS; NASDAQ: DDSS) today announced its wholly owned subsidiary, Labopharm Europe Limited, has completed a distribution and supply agreement with Merck Sharp & Dohme Limited (MSD), a United Kingdom (U.K.) subsidiary of Merck & Co., Inc., under which MSD will distribute and market Tradorec XL(R) (once-daily tramadol based on Labopharm's proprietary Contramid(R) technology).

Under the terms of the agreement, MSD has the exclusive right to market and sell Tradorec XL in England, Northern Ireland, Scotland, Wales, the Channel Islands and the Isle of Man. Labopharm will supply MSD with finished, packaged product at a fixed transfer price inclusive of gross margin. Labopharm will also receive an up-front payment of 650,000 British pounds.

"The United Kingdom is the second largest tramadol market in Europe, which represents a significant opportunity for Tradorec XL," said James R. Howard-Tripp, President and Chief Executive Officer, Labopharm Inc. "We're confident that our new partner, MSD, can build on the success to date and capitalize on the opportunity offered by our once-daily tramadol for the benefit of patients and physicians."

"We are very pleased to have finalized this agreement with Labopharm," said Deepak Khanna, Senior Vice President and General Manager, MSD, U.K. "An innovative medicine like Tradorec XL fits the profile of products that are of interest to MSD. It has unrealized potential and it complements our current portfolio."



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