Drug developer Labopharm Inc. (TSX:DDS) says it has received more than US$5 million in royalty payments from Purdue Pharma Products for sales of its Ryzolt pain treatment.

The Quebec-based company said Monday that it expects a US$4.8-million special royalty payment from Purdue, as well as a one-time payment of US$500,000 that settles outstanding royalties owed by Purdue.

Labopharm said the money will help pay off its share of the US$9.3 million in legal costs tied to patent disputes in the United States, and will also sever it from any future litigation costs Purdue could face over once-daily tramadol patents.

The company added that it is eligible to get another two special payments from Purdue, the first of US$1 million when Ryzolt sales surpass $20 million in any calendar year period before 2020. The second payment would be US$2 million on sales over US$40 million in the same periods.

Aside from those payments, Purdue will not be obligated to make any further payments to Laborpharm, it said.

"The monetization of the future expected royalty payments from Ryzolt provides Labopharm with additional liquidity as we commercialize new products such as Oleptro and twice-daily tramadol-acetaminophen," said Labopharm president and CEO James Howard-Tripp.

Labopharm added that it will supply Purdue with packaged Ryzolt for sale in the United States until further notice.