Gedeon Richter Limited and its wholly owned subsidiary Gedeon Richter USA, Inc. and Forest Laboratories Ireland, Ltd., a wholly owned subsidiary of Forest Laboratories, Inc. have entered into a collaboration agreement for Richter's atypical antipsychotic RGH-188 and related compounds.

RGH-188 is a novel, orally active potent D2/D3 antagonist, with a unique receptor binding profile compared to other atypical antipsychotics, in development for schizophrenia and bipolar mania as well as for other psychiatric conditions. Atypical antipsychotics are the mainstay of treatment for schizophrenia and are also widely used to treat the symptoms of bipolar disorder. The combined prevalence of these conditions is over four million patients. In 2003, sales of anti-psychotics in the US totalled over $8 billion and the market continues to grow at a substantial rate.

Upon execution of the agreement, Forest will pay Richter an upfront payment and other milestones if the development and commercialization of the product are successfully completed in Forest's territory. Forest will have exclusive rights to the product in the US and Canada while Richter will have rights in the rest of the world. Forest will also pay Richter a royalty on sales and will purchase API from Richter. The parties will collaborate on the development of the product and will jointly fund such development.

RGH-188 has entered phase I clinical trials in the UK. If phase I and phase II studies are successfully completed, it is possible that the compound will begin phase III clinical testing in the US before the end of 2006. In pre-clinical studies, the compound demonstrated a profile characteristic of the atypical antipsychotic class of drugs. The pre-clinical studies suggest that the product will be active and well tolerated in future clinical testing and may have a lower potential to cause some of the adverse events that are associated with certain members of this therapeutic class. RGH-188 is currently claimed by a patent application which, if issued, will expire in 2024, release from Forest Labs said here.

According to Erik Bogsch MD of Richter: "Richter's strategy is based on establishing strategic alliances. Our Company's original research is focused on central nervous system (CNS) and based on its sophisticated chemistry and pharmacology knowledge. This collaboration agreement is a strategic fit with one of the industry's leaders in CNS field, Forest Laboratories who has the scientific and marketing expertise in North America.

After an extensive pre-clinical programme, the compound has now entered the first phase of human testing which will take several years before it can be submitted to regulatory agencies. The success of the compound obviously will depend on the results of this extensive testing."

Howard Solomon, chairman and CEO of Forest said: "We have been seeking an antipsychotic drug for years because it obviously would fit beautifully with our other CNS products and our well established relationship with the appropriate specialists. We believe that Gedeon Richter's compound, based on available data, is a promising prospect for the treatment of schizophrenia. Of course, like all drugs in development, it is subject to the risks of more extensive human testing, but it has a validated mode of action and very good preclinical data."