The global healthcare investors Paul Capital Healthcare and Vernalis plc, a specialty bio-pharmaceutical company focused on products marketed to specialist neurologists, said they have signed a financing agreement relating to frovatriptan, Vernalis' product for the treatment of migraine.

Under the agreement, Vernalis will receive approximately €18.4 million in cash from Paul Capital Healthcare and, in return, Paul Capital Healthcare will receive approximately 90 per cent of Menarini's payments to Vernalis under their exclusive license and supply agreement for the commercialisation of frovatriptan in Europe and certain other territories. Vernalis will continue to supply Menarini with frovatriptan active pharmaceutical ingredient.

"Earlier this year, Vernalis restructured its operations to focus on its innovative discovery programmes and to advance its promising pipeline of development stage products to the point at which they can be partnered. This transaction with Paul Capital Healthcare secures significant, non-dilutive funds for Vernalis, giving us the platform to rebuild new shareholder value in the medium term," said Tony Weir, CFO, Vernalis.

Frovatriptan is currently approved for the acute treatment of migraine in Europe, the United States, Canada and seven Central American countries.

Dr Ken Macleod, a partner at Paul Capital Healthcare, said, "Migraine affects about 10 per cent of people and leads to billions of dollars in lost productivity each year. After extensively evaluating both the clinical and commercial data for frovatriptan, we believe this drug is positioned to capture a growing share of the market for migraine therapies. Growth capital is the hallmark of the companies and products in which Paul Capital Healthcare invests, and provides a compelling rationale for adding our investment in Vernalis and frovatriptan to our portfolio of investments".