Eurand has entered into a development and license agreement with GlaxoSmithKline to use its Microcaps taste-masking and AdvaTab oral disintegration tablet technologies to develop a new formulation of an undisclosed GSK product.

Under the terms of the agreement, GSK will fund the development of the product and Eurand will receive royalties on product sales. GSK will have exclusive commercialization rights in the U.S., and both companies will have certain rights to commercialize the product outside of the U.S. Eurand will retain exclusive, worldwide manufacturing rights. The companies plan to begin clinical trials in 2006 and apply for marketing authorization in the U.S. by the end of 2007.

GSK will pay Eurand a total of as much as $42 million based upon achievement of certain development, regulatory and sales milestones. Additional terms have not been disclosed.

Gearoid Faherty, chief executive officer of Eurand, commented, “We are delighted that GSK has chosen Eurand for this important project, we believe it further confirms our market leading position in the fields of taste-masking and oral disintegrating tablets. The combination of our Microcaps and AdvaTab technologies has received an enthusiastic reception from industry leaders such as GSK and we are currently in advanced contract negotiations with companies in Japan, Europe and the U.S. for a range of different products.”