LAB, which focuses on developing and manufacturing novel therapeutics for the inhalation market, said that the agreement represented an "ideal" situation, as it allowed the firm to avoid outsourcing manufacturing operations.
"With PharmaForm we accede to complementary know-how and also complementary manufacturing capabilities," said Halvor Jaeger, LAB's chief executive, during a conference call LAB said that the deal, which represents $7.5m in cash and $4.4m worth of LAB shares, will ensure manufacturing capabilities of its lead product Fentanyl Taifun in the US.
The firm's fast-acting Fentanyl formulation, delivered using its Taifun dry powder inhaler platform, is aimed at the treatment of breakthrough cancer pain - when flares of pain break through the regular pain medication.
Even though continuous cancer pain is controlled with maintenance doses of opiate-based analgesics, approximately two-thirds of patients experience episodes of breakthrough pain during treatments with long acting formulations.
LAB claims that its inhalable formulation of Fentanyl via Taifun is painless and is also the fastest alternative to oral, transmucosal and even sometime injectable medications.
For patients who suffer from this type of pain during their cancer treatment, the number of episodes can vary from one to eight per day and usually last 30 minutes to an hour.
So it is not surprising that the breakthrough cancer pain market worldwide is estimated to be $1bn annually, with drug makers trying to develop efficient drugs for breakthrough pain that can be easily administered and work rapidly.
The firm claims that Fentanyl Taifun is expected to produce pain relief within minutes from administration.
Phase I results established that only 5 minutes after administration, concentrations reached an average of 73 per cent of the respective maximum concentration, the product was well tolerated and no safety concerns were revealed.
The product is currently the object of a Phase II trial to investigate its efficacy and safety and the company said that PharmaForm's capabilities, particularly its hot-melt extrusion technique, will allow the company to launch Phase III trials in the second quarter of next year.
The hot-melt extrusion technique is a relatively new application of polymer processing technology for the production of pharmaceutical dosage forms.
The process consists of embedding a drug in a polymeric carrier while shaping the composite material to form a pharmaceutical product.
Several studies have proved that thermal processing of pharmaceutical powders is a practical method to prepare granules, sustained-release tablets and transdermal/transmucosal drug delivery systems.
LAB's innovation pipeline also includes therapeutics for asthma, chronic obstructive pulmonary disease (COPD) and growth hormone deficiencies.