Roche to pay Evotec up to $830 million for Alzheimer's compound

Swiss drug major Roche (ROG: SIX) has entered into an exclusive worldwide agreement with Germany’s Evotec (EVT: TecDAX) for the development and commercialization of Evotec’s MAO-B inhibitor in patients with Alzheimer’s disease (AD). The news sent Evotec’s shares up 16.9% to 2.15 euros in early trading this morning.

Roche will pay Evotec an upfront fee of $10 million and, under the terms of the deal, Evotec could receive further development and commercial milestone payments of up to $820 million as well as tiered double-digit royalties on sales. Roche will initiate studies in 2012 to demonstrate proof of concept and will be responsible for all clinical development, manufacturing and commercialization activities.

Evotec’s compound (EVT-302) is a novel, potent inhibitor of monoamine oxidase type B (MAO-B), an enzyme that breaks down the chemical messenger dopamine in the brain and contributes to the production of free radicals. Free radicals are known to cause oxidative stress which may contribute to pathogenesis of AD as demonstrated by the up-regulation of MAO-B expression in the brain of AD patients. For these reasons, the selective MAO-B inhibitor is targeted to treat AD symptoms and potentially slow disease progression