Sonus Pharmaceuticals Inc. is getting up to $48 million in acollaboration for its ultrasound imaging agent while keeping nearlyhalf of net revenues.

The Bothell, Wash., company signed a deal encompassingdevelopment and marketing of EchoGen Emulsion with AbbottLaboratories, of Abbott Park, Ill. Sonus has clinical and regulatoryresponsibilities, as well as that for medical and technical support, andAbbott has primary responsibility for U.S. marketing and sales.

As part of the deal Abbott paid $4 million for warrants to purchase500,000 Sonus shares at $16 each over five years. Exercise of thosewarrants could add $8 million to the investment. In addition Sonusgot $4 million upon signing and will get $1 million per quarter forseven quarters starting in July, and could receive another $20 millionin milestone payments related to new drug application (NDA) filing,NDA acceptance, advisory panel recommendation, FDA approvaland market launch, said Steven Quay, founder, president and CEO ofSonus.

Under another aspect of the deal Sonus could receive $5 million to$7 million if Abbott decides to go forward in certain additionalEchoGen applications.

Sonus stock (NASDAQ:SNUS) gained 20 percent, to $20.50, whenthe deal was announced last week. It closed at $20 Tuesday.

Pivotal studies of EchoGen have been completed in radiology andcardiology indications. A new drug application for EchoGen isexpected to be filed by the end of the year, with European filingexpected shortly thereafter.

Another significant part of the deal is that Sonus will receive 47percent of net EchoGen revenues in the U.S. A portion of thatrevenue will be used to fund its obligations under the deal.

"We're extremely pleased to have Abbott as our strategic partner,"Quay said. "Abbott has more sales reps [500] than all other imagingcompanies combined." n

-- Jim Shrine

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