Avanir Pharmaceuticals has signed a global research, development and commercialization agreement with Novartis to develop orally active small molecule therapeutics targeting macrophage migration inhibitory factor (MIF) as potential treatments for inflammatory diseases.

Under the terms of the agreement, Avanir is eligible to receive over $200 million in combined upfront and milestone payments upon achievement of development, regulatory, and sales objectives. Avanir is also eligible to receive increasing royalties on worldwide product sales. Avanir will receive research funding of up to $2.5 million per year for up to four years. Novartis will assume all responsibility for product development expenses and both parties will contribute expertise and intellectual property, a company release said.

"Increasing the expertise and understanding of MIF's role in the pathology of inflammatory diseases can substantially improve the prospects of bringing a novel product to the millions of people suffering from inflammatory diseases worldwide," said Gerald J. Yakatan, Avanir's president and CEO.

Avanir's small molecule research targets macrophage migration inhibitory factor (MIF), a pro-inflammatory cytokine that is thought to play a critical role in the pathology of disorders such as rheumatoid arthritis, psoriasis, and inflammatory bowel disease. Data suggest that MIF is an early mediator of multiple pro-inflammatory pathways. It is thought to be an important regulator of tumour necrosis factor alpha (TNF-alpha), macrophage migration, and the anti-inflammatory steroid response. Because MIF is positioned early in the inflammation cascade, regulating its function may have important therapeutic consequences.