NeuroSearch forms drug development collaboration with Lilly

Denmark-based biopharmaceutical company NeuroSearch has signed an agreement with Eli Lilly to form a three-year drug discovery and development alliance to investigate a defined number of undisclosed ion channel targets for their potential in treating various central nervous system disorders.

The aim of the collaboration is to discover and develop new medicines based on novel approaches to specific ion channel modulation. The collaboration will comprise intellectual property and know-how from both NeuroSearch and Lilly.

Under the terms of the agreement, NeuroSearch is eligible to receive up to $3 million from Lilly in upfront fees and research funding over the next three years, of $5 million will be paid up front. Lilly will also make a $17 million equity investment in NeuroSearch.

NeuroSearch will be responsible for the drug discovery programmes under the collaboration and potentially early development of novel drug candidates. Lilly will have various options to exercise license rights to individual compounds covered by the agreement and related intellectual property.

Upon exercise of license rights, Lilly will be responsible for all subsequent development and commercialisation activities. For each product, successfully developed and commercialised under the alliance, NeuroSearch may be entitled to milestone payments of up to $320 million plus royalties on the product’s global sales.

Flemming Pedersen, CEO of NeuroSearch, said: Our collaboration is structured to secure both a balanced risk sharing and very attractive long term revenue, if our efforts are successful, as well as significant near term financing to NeuroSearch.