Posted on 04/11/2011 5:34:43 AM PDT by DeaconBenjamin
LONDON: GW Pharmaceuticals has signed up Novartis to sell its cannabis-based drug Sativex in a range of markets, marking a key endorsement for the treatment from the major Swiss pharmaceutical company.
GW said Novartis will file and market the drug, which has been approved in some European countries and Canada as a treatment for spasticity due to multiple sclerosis (MS), in Australia and New Zealand, Asia -- excluding Japan, China and Hong Kong --, the Middle East and Africa.
The British firm said on Monday it would receive an upfront payment of $5 million, plus additional payments totalling $28.75 million based on milestones under the terms of the deal.
Shares in GW were 15.2 percent higher at 110 pence by 0814 GMT, valuing the group at about 145 million pounds ($238 million).
"GW could not have asked for a better partner in these regions for Sativex," said Peel Hunt analyst Paul Cuddon, who increased his target price by 11 percent to 178 pence after factoring in the upfront payment, half of the potential milestones and a royalty on sales.
Novartis has won FDA and European approval for its disease modifying multiple sclerosis pill Gilenya, which some analysts say could become a $3 billion-a-year-plus blockbuster and dominate the market for the neurological condition.
"Novartis has emerged at the forefront of the next generation of MS treatments, and is therefore ideally positioned to market Sativex as a symptomatic treatment alongside their disease modifying treatment," GW's managing director Justin Gover said in an interview on Monday.
The fact that Novartis was one of the world's leading oncology companies was an added attraction, he said.
GW's partner in the United States, Otsuka Pharmaceutical, is developing Sativex for the treatment of cancer pain.
GW will also receive royalties on sales of the drug, which is derived from cannabis grown at a secret locations in the English countryside.
Sativex, which is sprayed under the tongue, is made of two active ingredients from the cannabis plant.
Sativex is sold as a prescription drug in Britain by Bayer at a cost of around 11 pounds ($18) per day, while Almirall is the marketing partner elsewhere in Europe.
Novartis gets back in the game! Under their old name, Sandoz, they made Ovaltine and LSD.
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