Vernalis in $100m deal for new Parkinson's drug

Vernalis, the former British Biotech, has licensed its innovative new Parkinson's disease pill to a US company for up to $100m (£55m) - one of the biggest deals in the biotech sector this year.

Biogen Idec, the US biotechnology giant, is paying an initial $10m for the drug and paid a further $6m for new Vernalis shares, staving off a cash crisis at the historic UK company.

Vernalis has completed just one set of trials of the Parkinson's drug, codenamed V2006, but it shows promising results in stimulating the production of dopamine, the chemical in the brain whose loss leads to Parkinson's.

Simon Sturge, the chief executive, said the deal transferred the costs of future trials over to Biogen, although Vernalis keeps an option to co-market V2006 if the company has created a salesforce by the time the drug reaches the market, towards the end of the decade.

He said: "We don't have to now make the investment in the clinical development but, in the event it is successful, we can then participate in the marketing of it. We have also agreed double-digit percentage royalties. These are exceptional deal terms for something that is so early in development."

Vernalis shares leapt 16 per cent to 55.5p. They had previously fallen to within pennies of a record low because the company said in March that it was planning a rights issue.

It needs extra cash to pay for the acquisition of marketing rights to its only launched product, the migraine pill Frova, and for further trials of the drug. Ireland's Elan had originally bought the rights to Frova but sales had proved disappointing and Vernalis bought Elan out of the deal for $50m. The first $20m payment is due by the end of the year.

Mr Sturge said Vernalis was already in detailed discussions with several drug firms over re-licensing Frova.

Jonathon Senior, an analyst at Evolution Beeson Gregory, said: "While the $16m will not cover the entire cost of Frova, it does provide Vernalis some flexibility in terms of the nature and the timing of a fund raising. In addition, it strengthens the company's position in negotiations with other businesses concerning the relicensing of the Frova rights."

Biogen has agreed to buy a further $4m new shares when Vernalis launches an equity fund raising and Mr Sturge promised a resolution to the company's funding difficulties soon. "It is our goal to secure the long-term financial position of the company in the next two or three months," he said.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee