Avigen Inc has signed an agreement with SDI Diagnostics International LTD, a division of Sanochemia Pharmazeutika AG, an Austrian-based pharmaceutical company. Under the terms of the agreement, Avigen receives an exclusive North American license to develop and commercialise proprietary formulations of the neuroactive compound tolperisone (AV650), a small molecule for the treatment of disabling neuromuscular conditions.

Avigen will provide SDI an upfront payment of $3 million; payments based on successful clinical and regulatory product development milestones; assumption of certain liabilities and royalty payments on sales. In return, Avigen receives the rights to all current and future proprietary formulations of tolperisone developed by SDI and exclusive marketing and sales rights in North America. The companies have also entered into a long-term supply agreement in which SDI, a leading API (active pharmaeutical ingredients) manufacturer, will manufacture the product for Avigen, states a company release.

"AV650, which is a unique neuroactive drug to treat disabling neuromuscular spasm and spasticity resulting from muscle injuries and serious neurological diseases, is synergistic with our AV411 programme for neuropathic pain," said Kenneth G. Chahine, Avigen's president and CEO.

'The transaction also delivers on our commitment to expanding our pipeline by in-licensing a compound with an established safety and efficacy record in Europe and establishes a collaboration with SDI that considerably strengthens Avigen's pipeline and positions both companies for solid long-term growth," added Chahine.

The compound is a leading treatment in Europe for painful muscle spasm, but has never been submitted for approval in the United States. Avigen intends to file an investigational new drug application (IND) with the US FDA in early 2006 and develop AV650 for the treatment of disabling neuromuscular spasm.

Avigen is a specialty biopharmaceutical company focused on unique small molecule therapeutics and biologics to treat serious neurological disorders, including neuropathic pain.