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Sales of Labopharm's once-daily tramadol product for the third quarter offiscal 2007 increased to $2.8 million from $1.1 million for the third quarterof fiscal 2006, the result of product shipments to a larger number of marketsin the third quarter of fiscal 2007, as well as higher average selling pricesin the third quarter of fiscal 2007, primarily due to the launch of theproduct in Canada, where selling prices are higher than in Europe. Once-dailytramadol sales for the first nine-months of fiscal 2007 increased to $10.4million from $4.0 million for the same period of fiscal 2006. Adjusted grossmargin for the third quarter and first nine months of fiscal 2007 increased to56% and 50%, respectively, from 37% and 44% for the corresponding periods in2006.
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"While our quarterly product revenue will continue to fluctuate with thetiming of orders typically associated with the early stages of productlaunches, our once-daily tramadol product is steadily achieving penetration ofour target market(1) in Europe with our market share(2) reaching almost 4% inSeptember," said James R. Howard-Tripp, President and Chief Executive Officer,Labopharm Inc. "Our product has met with particular success in Spain, where itachieved a market share in September of almost 14%. We are confident that wecan achieve similar results in other markets as we continue to address theinitial challenges in some of those countries."
Labopharm and its marketing partner, Paladin Labs Inc., launchedonce-daily tramadol in Canada under the brand name Tridural(TM). The Companyalso completed licensing and distribution agreements for once-daily tramadolfor South Korea with WhanIn Pharmaceutical Co., Ltd., for Greece withLavipharm S.A. and for Israel with Dexcel Pharma Technologies Ltd. Labopharmexpects its product to be launched in the South Korean and Greek markets in2008. Labopharm's formulation is currently under regulatory review in Israeland the Company expects a response from the Israeli regulatory authority bymid-2008.
To date, Labopharm has secured marketing partners for its once-dailytramadol in more than 50 countries worldwide and regulatory approval in 25countries. The Company's partners will continue to launch its product inadditional markets, globally, throughout 2008.
In the U.S., Labopharm continues to vigorously pursue regulatory approvalof its once-daily tramadol, appealing the U.S. Food and Drug Administration's(FDA) decision in its Approvable Letter through initiation of the Agency'sFormal Dispute Resolution process. The Company believes that it has met thestatutory standards for approval of its formulation and that appealing theFDA's decision through this process represents its best opportunity toexpeditiously resolve this matter.
Labopharm has completed patient enrolment in its North American Phase IIIclinical trial for its once-daily formulation of the antidepressant trazodone,ahead of schedule. More than 400 patients are enrolled in the study.
"Our once-daily formulation represents the opportunity to addresssignificant unmet needs in the treatment of depression," said Mr.Howard-Tripp. "Trazodone has a proven history of efficacy and we believe thatby controlling the blood concentration levels through our Contramid(R)controlled-release technology, we can offer a once-daily formulation with apotentially improved side effect profile that takes advantage of trazodone'sunique sedative effects, eliminating the need for adjunctive therapy oftenassociated with other anti-depressants to address related conditions such aspoor sleep quality. We look forward to reporting data from our Phase III studyin the second quarter of
