Acerus Pharmaceuticals Corp. said it will pay $7.5 million to forgo all of its obligations under a 2013 licensing deal with Mattern Pharma AG.

Acerus owed royalties on upfronts, milestones and revenues from products including Natesto, a nasal gel used to treat men with testosterone deficiency.

The company was required to pay a minimum $5 million in annual royalties if gross product sales reached at least $75 million or $2.5 million if they were below the amount threshold.

While all of Acerus' material obligations to Mattern are suspended, the latter's commitments to Acerus remain in force.

Acerus CFO Ken Yoon said the buyout is expected to bring higher gross margins and greater clarity to the reporting of Natesto's cost of goods.

Canada-based Acerus Pharmaceuticals is a specialty pharmaceutical company focused on developing products for men's and women's health.