MONT SAINT-HILAIRE, Quebec, Canada, Aug. 8 -- Axcan Pharma and Diomed Inc. have signed a five-year contract in which Diomed will develop and supply lasers and fibers to be used with a photosensitizing drug that was recently acquired by Axcan for use in photodynamic therapy. The deal calls for Axcan to pay $5 million in cash upon approval of Diomed's laser by the US Food and Drug Administration.Diomed's 630 PDT diode lasers and optical delivery fibers will be used with Axcan's photosensitizing drug PHOTOFRIN, which is used in the treatment of some forms of cancer. Axcan is a North American pharmaceutical company based in Canada that specializes in the field of gastroenterology. In addition to its marketing activities, Axcan carries out research and development of products at an advanced stage of development that it acquires or licenses from third parties. Diomed is a significant supplier in the medical diode laser market and holds a share of the market for traditional surgical lasers.