On Tuesday, both Merck & Co. and Santarus Inc. confirmed that the former's over-the-counter version of the latter's heartburn drug, Zegerid, to be marketed under the same name, has been awarded approval by the US Food and Drug Administration.

Santarus had partnered with Merck over the development of the over-the-counter version of its popular drug some time back, and stands to receive $20 Million worth of milestone payments based on the approval, as was decided under the terms of the agreement. In addition, the company could also receive up-to $37.5 Million as and when sales targets are reached, as well as royalties on sales.

As has been confirmed by Merck, Zegerid's OTC version will be hit the markets in the first half of the coming year, and will be sold by the Schering-Plough Health Care Products division, which the drug maker had acquired in November.

A combination of omeprazole and sodium bicarbonate, the medicine reportedly prevents heartburn by "suppressing stomach acid for 24 hours".

Post announcement of the approval, Santarus shares climbed to $5.72 in extended trading. They had closed on Tuesday at $4.29 on NASDAQ.