Vanda reaps $200M upfront in Novartis drug pact

Shares of Vanda Pharmaceuticals swiftly shot up this morning after the developer announced a new licensing deal with Novartis that will be worth up to $465 million--with a whopping $200 million of that coming in an upfront payment.

Novartis is paying for the exclusive rights to market Vanda's newly-approved schizophrenia drug Fanapt (iloperidone) in the U.S. and Canada. For now at least Vanda retains the rights to the drug outside of the U.S. and Canada. And Novartis is responsible for the development of an injectable form of the drug. Rockville, MD-based Vanda is positioned to reap royalties from sales.

"I am very excited about our agreement with Novartis, as we now have one of the premier pharmaceutical companies in the world to commercialize the oral formulation and further develop and commercialize the depot formulation of Fanapt in the U.S. and Canada," said Vanda CEO Mihael H. Polymeropoulos, M.D. "This agreement allows Vanda to utilize current and future data generated by Novartis on the oral and depot formulations to pursue regulatory approvals outside the U.S. and Canada."

- here's the press release
- read the story from BusinessWeek