ProStrakan yesterday said it had signed a joint venture deal with Swedish pharmaceutical company Orexo in a move aimed at giving the Borders-based specialist pharmaceutical group low-cost access to the Nordic countries.

The company, which has its headquarters in Galashiels and employs around 70 of its 300 staff in Scotland, has a raft of key products including Tostran, a gel for treating testosterone deficiency hypogonadism, and Rectogesic, a treatment for chronic anal fissures.

Until now, only Tostran and Droperidol, a drug to counter post-surgery nausea and vomiting, have been launched in Sweden.

Dr Wilson Totten, Prostrakan's chief executive, said: "The Nordic countries are very important to ProStrakan, and teaming up with Orexo will considerably boost the ability of both companies to enhance our performance in this market and increase sales."

Under the terms of yesterday's deal, ProStrakan's existing Swedish subsidiary, Pro- Strakan AB, will be used as the joint venture company and will distribute the product portfolios of both Orexo and ProStrakan in Norway, Sweden, Finland, Denmark and Iceland.

Orexa paid £1.3m to acquire a 50% stake in the Swedish joint venture subsidiary firm as part of the agreement.

Richard Parkes, a research analyst with broker Piper Jaffray, said: "The agreement will allow ProStrakan to strengthen the reach of its EU sales and distribution capability at minimal initial costs."

ProStrakan's portfolio also includes Rapinyl, a drug to manage pain caused by cancer, and Sancuso, a patch for the treatment of chemotherapy-induced nausea, both of which are yet to be approved by European regulators.

ProStrakan shares fell with a weak sector and closed down 1.75p at 83.75p.