Xenon Pharmaceuticals Inc has entered into an agreement with Novartis Pharma AG to research, develop and commercialize compounds from Xenon's Stearoyl-CoA Desaturase-1 (SCD1) drug development programme. Precommercial payments to Xenon under this transaction total up to US$157 million. Xenon will also receive royalties on products developed from this collaboration.

Under this agreement, Novartis has an exclusive royalty-bearing worldwide license to develop, manufacture and commercialize products related to Xenon's SCD1 programme, with Xenon retaining an option to co-promote in certain territories. Novartis will also fund Xenon scientists for a minimum of two years as part of a collaborative research programme and, subject to Xenon shareholder approval, will make an equity investment in Xenon, official statement from Xenon said.

SCD1, a key regulatory enzyme in fatty acid metabolism, is a novel target for the treatment of obesity and its resulting metabolic consequences, including the metabolic syndrome. Xenon is focused on developing small molecule inhibitors of SCD1 and has advanced its programme into preclinical development. This collaboration is being forged to pursue rapid validation of SCD1 as a relevant therapeutic target in patients using SCD1 inhibitor compounds.

"Inducing weight loss by increasing metabolic rate through lipid oxidation is a novel mechanism of action for treating obesity," Simon Pimstone, Xenon's president and CEO noted adding, "A successful product would represent a first-in-class drug for this very large market. This partnership will enable Xenon to realize the maximum potential value of its SCD1 programme and support our goal of commercializing innovative medicines based on genetically-validated targets."

"The SCD1 enzyme has shown promise as a key regulator of fatty acid metabolism and insulin action, and Xenon has made significant progress in advancing the novel SCD1 target into small molecule development," said Thomas E Hughes, Global Head of the Diabetes and Metabolism Disease Area at the Novartis Institutes for BioMedical Research. He added, "Xenon's SCD1 programme complements our own portfolio of approaches in diabetes and other metabolic diseases and is fully aligned with Novartis' goal of developing novel therapeutics addressing unmet medical needs".

Xenon is a privately owned, clinical genetics-based drug discovery and development company engaged in developing small molecule therapies based on the genetic causes of select metabolic, neurological and cardiovascular diseases.