GlaxoSmithKline and NeuroSearch expand the scope of strategic alliance
15 November 2006
GlaxoSmithKline (GSK) and NeuroSearch have agreed to expand the scope of the current 5-year strategic alliance within CNS and ion channel drug discovery and development:
A change in the distribution of work, risk and reward between the two parties.
Full exploitation of NeuroSearch’s ion channel platform – also for non-CNS indications.
A new equity structure under which NeuroSearch can sell shares to GSK of up to EUR 30 mill. (DKK 223 mill.).
Change in the distribution of work, risk and reward; For selected drug candidates NeuroSearch will in the future be responsible for the transition of product candidates from research to development and for the early clinical development until completion of clinical Phase IIa (“Proof-of-Conceptâ€) whereas GSK will be responsible for the late-stage development, production and marketing. NeuroSearch and GSK will continue to collaborate in such programmes and GSK milestone payments will commence as from start of clinical Phase I studies thereby ensuring early financing from GSK as well as financial upside to NeuroSearch.
For products where NeuroSearch successfully has completed the development until clinical phase IIa, NeuroSearch will receive EUR 109 million (DKK 812 million) in development milestones and attractive double digit royalties of GSK net sales.
Under the expanded alliance GSK will maintain its financial obligations existing from the original collaboration agreement.
Full exploitation of NeuroSearch ion channel platform; The NeuroSearch/GSK alliance is now organised under the GSK CEEDD (“Center of Excellence of External Drug Discoveryâ€) Business Unit. This organization allows for NeuroSearch drug discovery programmes being made available to all of GSK therapeutic areas, i.e. both inside and outside the CNS area, ensuring that NeuroSearch’s unique ion channel platform is fully explored under the alliance.
Stock purchases; As part of the expanded agreement, NeuroSearch can sell additional ordinary NeuroSearch shares at market price to GSK for an amount of up to EUR 30 million (DKK 223 million) upon the filing of 6 IND’s.
The aim of the expansion of the agreement is to:
Secure an optimal and smooth transition of drug candidates from research into development.
Secure a full exploration of NeuroSearch’s ion channel platform - both for CNS and non-CNS indications.
Change NeuroSearch’s risk/reward profile as part of their growth strategy.
Exploit NeuroSearch’s development capabilities optimally.
Maxine Gowen, Senior Vice President of GSK External Drug Discovery commented:
“We are very pleased with the alliance with NeuroSearch and the expansion of our collaboration. We want to fully explore the potential of NeuroSearch’s unique ion channel platform across multiple therapeutic areas. It is our aim that our major external collaboration partners have the size and capabilities that enable them to be responsible for a significant part of the drug discovery process. Over the past 2-3 years we have seen that NeuroSearch has gradually expanded its development capabilities and capacity in order for us to make this important move.â€
Flemming Pedersen, CEO of NeuroSearch commented:
“We strongly support the GSK way of organising external collaborations under the CEEDD structure and the new way of collaborating goes well in hand with NeuroSearch’s strategic growth ambitions and as part of this also to pursue promising product opportunities outside the CNS area. We are also very pleased with the continued strong financial commitment from GSK which significantly expands our strategic and financial options.â€
The extension of the alliance with GSK will neither influence the expectations to the financial result in 2006 nor cash reserves.
Asger Aamund
Chairman of the Board