Biovail buys 1730/fipamezole rights in North America from Santhera for $47 million plus $145 million possible royalties

Canada's Biovail has entered into an agreement with Switzerland-based Santhera Pharmaceuticals to acquire the US and Canadian rights to develop and commercialize the latter's JP-1730/fipamezole for the treatment of dyskinesia in Parkinson's disease in a deal that could be worth a potential $193 million to the Swiss firm. JP-1730/ fipamezole is a first-in-class compound that, in a recent Phase IIb study, displayed the potential to reduce levodopa-induced dyskinesia.

Under the terms of the agreement, which covers only the U.S. and Canada, and subject to customary closing conditions, Biovail will make a upfront payment of $8 million, a further payment of $4 million upon the successful closing of Santhera's acquisition of Oy Juvantia Pharma and will pay up to $35 million in potential development and regulatory milestones associated with the initiation of a Phase III study, regulatory submissions and approvals of JP-1730/fipamezole in DPD. The agreement also stipulates that Biovail make additional milestone payments of up to $145 million as certain sales thresholds are met. The Canadian drugmaker will also make royalty payments of 8%-15% on net commercial sales of JP-1730/fipamezole.

Should Biovail pursue a second indication, up to $20 million in additional success milestones would be payable to Santhera upon approval.

Biovail will be responsible for the remaining clinical development programs and costs in the USA and Canada. The companies have agreed to collaborate on the development program. Santhera will have the right to use and sublicense data generated for development and commercialization purposes outside of North America. Initiation of the first Phase III study in the USA is scheduled for 2011. Santhera will retain US co-promotion rights.

Commenting on the news, analysts at Zacks Equity Research said: 'We believe that a growing elderly population suffering from this disease will further expand the scope of the market in the coming years. This leads us to conclude that JP-1730/fipamezole, which demonstrated the potential to reduce levodopa-induced dyskinesia in a mid-stage study, can become a very important player in the management of this troublesome disease.'