GlaxoSmithKline has formed a new drug discovery and development alliance with Pharmacopeia, an innovator in the discovery and development of novel small molecule therapeutics. GSK, through its recently established Centerof Excellencefor External Drug Discovery (CEEDD), and Pharmacopeia will collaborate to deliver clinically validated therapeutic candidates to GSK's global research and development organisation.

The aim of the alliance is for Pharmacopeia to discover active molecules and bring them forward to clinical proof of concept, yielding novel candidates in broad therapeutic areas. GSK will have exclusive options to conduct Phase III clinical trials and to commercialise pharmaceutical products from the collaboration on a worldwide basis. Pharmacopeia will retain rights to programmes for which GSK does not exercise its option, stated a GSK release.

Under the terms of the agreement, Pharmacopeia will receive $15 million in cash payments from GSK. In addition, each drug development programme pursued under the alliance will be subject to success-based milestone payments totalling up to $83 million for a successful programme and a double digit royalty. In connection with the alliance, GSK also receives warrants to purchase Pharmacopeia stock at a 25% premium to the trailing 30-day closing price average at the commencement of the alliance.

Maxine Gowen, Senior Vice President and head of the Centerof Excellencefor External Drug Discovery at GSK stated, "The Pharmacopeia relationship exemplifies a new collaborative model for GSK. Through the CEEDD we will ally GSK's understanding of medical needs with biotech innovation to bring new medicines to patients. At the same time as GSK provides its broad experience, Pharmacopeia brings its unique perspective that, consistent with the CEEDD's mission, adds to our internal capabilities. We are very pleased to be able to announce the Pharmacopeia alliance as the first new collaboration for the CEEDD."