According to the deal, Sandoz will pay Apricus Biosciences up to 21 million euros, or $27.4 million. The payment will be divided into a fixed upfront payment and specific commercial milestones, as well as double-digit royalties on net sales.
"We are very excited about this major European collaboration with such an important international pharmaceutical company as Sandoz,” chief executive Bassam Damaj said in a statement.
"This is yet another important milestone in our strategy to make Vitaros available worldwide and the successful continuation of the execution of our commercialization strategy of Vitaros."
Apricus' drug Vitaros is approved in Canada and the specialty pharmaceutical company has also filed for marketing approval in the United States.
Apricus, founded in 1987 and with about 35 employees, makes drug candidates based on its NexACT delivery technology.
The NexACT technology is designed to enhance the delivery of an active drug to improve therapeutic outcomes and cut down systemic side effects associated with oral and injectable medications.
Shares of the company were up 4.68 percent at $3.58 each on the Nasdaq Wednesday afternoon.