Indevus Pharmaceuticals, Inc has signed a development, license and commercialization agreement with Teva Pharmaceutical Industries Ltd for the exclusive, worldwide rights to pagoclone.

Indevus previously announced promising data from its eight-week, placebo controlled, double-blind, multi-centre phase-II trial in patients with persistent stuttering which showed that pagoclone produced a statistically significant benefit in multiple primary and secondary stuttering endpoints compared to placebo. Pagoclone is a novel member of the cyclopyrrolone class of compounds and acts as a gamma amino butyric acid (GABA) selective receptor modulator.

Pagoclone is a novel, non-benzodiazepine, selective GABA-A receptor agonist. In clinical studies in anxiety disorders, it has been shown to reduce the symptoms of panic disorder and generalized anxiety disorder without causing the sedation or withdrawal effects seen with benzodiazepine agents.

Under the terms of the Agreement, which is subject to applicable regulatory clearances and customary conditions, Indevus will conduct and Teva will reimburse Indevus for its expenses for a phase-IIb study. The placebo- controlled study will involve approximately 300 patients with stuttering in the US treated for a period of six months and is expected to commence enrolment by Q1 2009.

Following the completion of a successful phase-IIb study, the Agreement provides for Indevus to participate on a 50/50 basis with Teva in the US, sharing development and marketing costs, and splitting future profits, in addition to receiving milestone payments. Under certain circumstances, either party may convert the Agreement from the 50/50 arrangement to a royalty structure where Teva will be responsible for all development and commercial costs in the US and Indevus would receive royalties on net sales, in addition to milestones. In either case, if the arrangement continues, Teva will be responsible for the conduct of the phase-III program.

For territories outside of the US, Teva will be responsible for all future development and commercialization and Indevus will receive milestones and royalties on net sales.

Under the 50/50 participation, Indevus could receive up to $92.5 million (including the phase-IIb study expenses) in US and European development milestones and R&D reimbursement. In the event of a conversion to the royalty structure, in addition to the $92.5 million of milestones and reimbursements, Indevus could receive up to $50.0 million in U.S. based sales threshold milestones.

"We are excited that we have partnered pagoclone with a leading pharmaceutical company with a focus on central nervous system conditions," said Glenn L Cooper, chief executive officer and chairman of Indevus. "There are currently no approved drugs anywhere in the world for patients with stuttering. Pagoclone has tremendous potential to become a highly significant commercial product, as well as to provide a ground-breaking therapy to the nearly three million Americans and millions of patients around the world who are afflicted with this condition. The deal we have negotiated with Teva allows us to conduct a definitive phase-IIb trial, funded by our partner. If the trial is positive, we believe that both companies will have a unique opportunity to commercialize the first pharmaceutical product for the millions of patients who stutter."

Indevus Pharmaceuticals is a specialty pharmaceutical company engaged in the acquisition, development, and commercialization of products to treat conditions in urology and endocrinology.