NeuroSearch and GlaxoSmithKline (GSK) announced a five-year research and development alliance. The alliance comprises a number of research programmes within ion channels and the treatment of diseases of the central nervous system (CNS) including depression, anxiety, and schizophrenia. The new alliance combines NeuroSearch's innovative research and development, and strong technology platform with GSK's research, development, and commercial strength.
The option agreement gives GSK access to new drug candidates from NeuroSearch's research and development within the defined area. This includes the Phase II triple monoamine re-uptake inhibitor NS2359, the Endovion programme and several other research programmes. The existing collaboration with GSK in depression disorders is integrated in the new agreement.
Under the terms of the five-year agreement NeuroSearch will receive a total of EUR 82 million (DKK 610 million) in guaranteed payments. On signing the agreement, NeuroSearch will receive EUR 46.8 million (DKK 348 million), comprising EUR 29.1 million (DKK 217 million) of up-front and research payments, and EUR 17.7 million (DKK 132 million) for 616,000 new NeuroSearch shares to be issued to GSK. The shares correspond to an 8.7per cent increase of the share capital equal to GSK having a strategic equity interest in NeuroSearch of 8.0per cent after the capital increase. The purchase price of DKK 214 per share of DKK 20 represents a 30per cent premium to the average market price over thirty days before the agreement was signed.
When GSK exercises its option in respect of the individual programmes, GSK will also assume responsibility for funding the project costs involved. In addition to the guaranteed payments above, NeuroSearch may receive milestones based on the continued successful development of NS2359 and any other candidates accepted by GSK. For NS2359 these payments may total EUR 98.5 million (DKK 733 million). The milestones payable by GSK for other candidates will depend upon the stage of development at which GSK accepts the compound and may range from EUR 32.7 million (DKK 243 million) to EUR 90 million (DKK 670 million) per candidate. NeuroSearch will also receive royalties on sales of successfully launched compounds. Further financial details were not disclosed.
Tadataka Yamada, chairman, R&D at GSK, commented: "Diseases of the central nervous system are particularly debilitating and represent a massive unmet medical need. Combining the skills and resources of GSK and NeuroSearch will accelerate and augment our current efforts to make effective new treatments available to patients as quickly as possible. GSK particularly values the collaborative culture at NeuroSearch, which bodes well for the success of our alliance"
President & CEO Dr Buus Lassen of NeuroSearch says, "I am pleased that we were able to conclude this important strategic alliance with GSK as our two companies have had a well-functioning and trustful partnership within depression research for three years. I have a strong expectation that this extended partnership will be a major success for both companies."
Dr Buus Lassen continues: "This agreement is one of the most important milestones in our history and is a major recognition of NeuroSearch's competencies within research and development. The agreement significantly increases the generation of value in NeuroSearch and strengthens our financial resources considerably."