US drugmaker Eli Lilly has struck a licensing deal with Sanofi that would allow its French rival to pursue regulatory approval for a non-prescription version of Lilly's erectile dysfunction treatment Cialis.

Terms of the deal were not disclosed.

Cialis was first approved by the European Medicines Agency in 2002 and by the US Food and Drug Administration in 2003. Last year, it generated $2.16 billion in worldwide sales, passing Pfizer's Viagra, which had sales of $1.9 billion.

Since its launch, the Lilly drug has racked up total sales of more than $14 billion.

Under the terms of the agreement, Sanofi will acquire exclusive rights to apply for approval of Cialis tablets to be sold over the counter in the US, Europe, Canada and Australia.

The drugmakers say an OTC version of Cialis could provide easier treatment for impotence sufferers and also help stem the illicit online sale of fake or stolen products.

Observers also see the move to sell an OTC version as an attempt to extend patent exclusivity.

Pharmaceutical experts say Sanofi will have to demonstrate to regulators that men can correctly decide whether to take the drug without a doctor's guidance.

In 2007, Pfizer applied to European regulatory authorities for approval of an OTC status for Viagra, but withdrew the application a year later after it appeared that permission would not be given.