Cephalon, Inc and ImmuPharma PLC, a European pharmaceutical company, announced that the companies have signed an Option Agreement providing Cephalon with an option to obtain an exclusive, worldwide license to the investigational medication Lupuzor for the treatment of Systemic Lupus Erythematosus. ImmuPharma is now conducting a large phase-IIb study of Lupuzor in patients in Europe and Latin America.

Under the terms of the option agreement, Cephalon will pay ImmuPharma a $15 million upfront option payment. If the phase-IIb studies are successful and if the option is exercised then the parties enter into an exclusive worldwide license agreement and ImmuPharma will receive a one-time license fee, milestone payments upon the achievement of regulatory milestones and royalties on commercial sales of Lupuzor. The various milestone payments which include sales milestones may total up to $500 million. Upon exercise of the option, Cephalon will assume all expenses for phase-III studies and subsequent commercialization of the product.

"We are excited about entering another specialty market and the potential Lupuzor presents for us to further diversify our product portfolio and to bring the first specific medication for the treatment of lupus to patients living with this chronic, potentially life-threatening disease," said Frank Baldino, chairman and CEO of Cephalon. "Our current cash position has created the opportunity to make this type of deal, which helps to position Cephalon and our pipeline for longer term growth."

"We are truly delighted to have this agreement with Cephalon and believe they would be a great partner to take Lupuzor forward. It represents an important landmark for the company and secures the future for our most advanced asset. Importantly, we have appreciated the positive chemistry between Cephalon and ourselves and believe we would work well together," said Dimitri Dimitriou, CEO of ImmuPharma.

Lupuzor is a first-in-class immune modulating treatment that has shown, through a unique mechanism, to modulate a specific subset of CD4 T cells which has been shown to play a critical role in the physiopathology of Lupus.

Founded in 1987, Cephalon is an international biopharmaceutical company dedicated to the discovery, development and commercialization of many unique products in four core therapeutic areas: central nervous system, pain, oncology and addiction.

ImmuPharma PLC is a drug discovery and development company headquartered in London, UK and quoted on AIM of the London Stock Exchange.