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UPDATE 1-Cipher shares jump on tramadol FDA approval

TORONTO, May 10 (Reuters) - Cipher Pharmaceuticals said on Monday U.S.

regulators approved its extended-release tramadol treatment for moderate to moderately severe chronic pain in adults, sending its shares up more than 25 percent. With the approval of the U.S. Food and Drug Administration, the Toronto-area company said it is looking to launch the tramadol product into the $200 million a year U.S. market in the first quarter of 2011. However, the exact timing is contingent on the outcome of a patent dispute between Purdue Pharma and rival Par Pharmaceutical. Earlier this year a U.S. court ruled in favor of Cipher in a similar patent case. Larry Andrews, Cipher's president and chief executive, said the company was in the "advanced" stages of finalizing a distribution agreement with a U.S.-based company. He said it would be a traditional milestone and royalty payment agreement. "We could potentially launch at any time, once we get a partner on board.

However, to be prudent, I think a potential license partner would like to know the outcome of the Par appeal before they go ahead and launch the product," said Andrews. A decision on the appeal is expected by the fourth quarter. "Certainly, we plan to have a partner on board prior to the end of the year," he said. Cipher shares were up 27.3 percent at C$1.40 on the Toronto Stock Exchange. ($1=$1.03 Canadian) (Reporting by Scott Anderson; editing by Rob Wilson) Keywords: CIPHER/ (scott.anderson@reuters.com; +1 416 941 8106; Reuters Messaging: scott.anderson.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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