Sanofi signs on to sell Vivus ED drug in emerging markets

Everyone makes mistakes. The important thing is to learn from them, as Vivus ($VVUS) is trying to show its investors. After rolling out its weight-loss drug Qsymia solo, a move that spurred plenty of shareholder discontent, the company is taking marketing partnerships for erectile dysfunction drug Stendra seriously. Thursday, it announced a deal with Sanofi ($SNY) that covers licensing and commercialization in emerging markets.

Under the agreement, the third for Stendra, Sanofi will market the drug exclusively in Africa, the Middle East, Turkey and the Commonwealth of Independent States, which includes the fast-growing Russian market. The French drugmaker will also handle obtaining regulatory approval in those countries. Vivus is eligible for up to $61 million in upfront payments and milestones, with additional royalties based on sales performance.

The agreement follows marketing deals Vivus has already inked with Menarini and Auxilium ($AUXL). In July, Vivus signed over rights to Menarini to launch the drug in 40 European countries, Australia and New Zealand; as of October, Auxilium, which already touts a portfolio of ED treatments, will put 150 sales reps behind Stendra in the U.S. and Canada.

As far as navigating emerging markets, Sanofi is a pro. The company has been a presence in many emerging markets for decades; more recently, coming up against the patent cliff, CEO Christopher Viehbacher turned to emerging markets moves for diversification, picking up a string of companies across the globe to strengthen Sanofi's foothold in developing nations. It now boasts 40 manufacturing sites and extensive doctor-training programs in emerging markets, which contributed nearly a third of the company's overall sales last year.

Having Sanofi on hand to take care of regulatory approval in emerging countries should also give Vivus a boost. Failure to win regulatory backing in Europe for Qsymia was one thing that set off investors earlier this year, resulting in a bitter proxy war that eventually led to a board shakeup and the ousting of then-CEO Leland Wilson. The main catalyst, of course, was the failed U.S. launch of Qsymia, which many blamed on the absence of a marketing partner for the drug. After a highly anticipated approval, the obesity therapy has generated only meager sales; and while Vivus is busy making Stendra deals, Qsymia is still in dire need of help.

- read the release

Special Report: Top 10 Drugmakers in Emerging Markets - Sanofi