Altea Therapeutics, an Atlanta-based biotechnology company known for its patches that deliver insulin through the skin, announced that it has entered into a partnership with Hospira Inc., a global pharmaceutical and medication delivery firm.

The new product will use Altea's proprietary transdermal delivery system.

"Altea's patches currently deliver insulin, applied on the skin," said Dr. Eric Tomlinson, president and CEO of the firm. "We are looking at some pain medications that we think could be delivered through patches, including narcotic analgesics."

Its patches deliver insulin around the clock, he said, negating the need for patients to take shots.

Under terms of the deal, Altea said it has granted Hospira exclusive worldwide rights to develop and commercialize the new product.

Altea said it will fund some Phase 1 clinical studies, after which Hospira will pay for further product development, manufacturing and commercialization.

In return, Altea will receive from Hospira an undisclosed upfront payment, which includes an equity investment. Altea also said it could receive clinical, regulatory, commercialization and sales performance milestone payments of up to $109 million, and undisclosed royalties on sales of the product.

"For a pre-clinical stage deal, the terms and economics are remarkable and show the validation of what we are doing," Tomlinson said. "They are now an investor in Altea Therapeutics for a pre-clinical stage deal. It's very important economically. It's a transformational deal for our company."

Altea, which has 50 full-time employees, is an emerging specialty pharmaceutical company developing and commercializing products based on a new transdermal patch technology that can deliver therapeutic levels of water-soluble small drugs, proteins, carbohydrates and vaccines through the skin.

Tomlinson said Altea has demonstrated in clinical studies that its patented system delivers through the skin compounds that typically are administered by needle injections.

"This agreement further validates the development of Altea Therapeutics' transdermal patch technology for drugs that previously were administered by needle injection or infusion," Tomlinson said. "Based on our existing relationship with Hospira, we believe they are the ideal partner with the technological and scientific expertise and the global commercial reach necessary to develop and commercialize this product."

Altea is conducting clinical trials in the United States for its products, which are designed to provide continuous delivery of insulin for people with Type 1 and Type 2 diabetes, and another patch that provides "rapid and safe management of moderate to severe pain," Tomlinson said.

Hospira, he said, is the world leader in specialty generic injectable pharmaceuticals. The company is headquartered in Lake Forest, Ill., and has more than 14,000 employees.

Georgia's biotech industry accounts for more than 15,000 jobs, a payroll close to $1 billion and product sales of $7 billion.