GlaxoSmithKline has entered into an alliance with Valeant Pharmaceuticals International which gives the UK-based drugs major exclusive worldwide rights to retigabine, the US firm’s promising epilepsy compound.

Retigabine is a first-in-class neuronal potassium channel opener which is being developed the for treatment of adult epilepsy patients with refractory partial onset seizures. The compound has shown “robust efficacy and safety as demonstrated in two large, completed Phase III trials” conducted in patients who were receiving treatment with up to three antiepileptic drugs, the firms say, and they plan to file retigabine in the USA and Europe by early 2009.

Under the terms of the deal, Valeant will receive an initial payment of $125 million which covers the rights to retigabine, another epilepsy treatment VRX698 and other back-up compounds in its potassium channel opener programme. The Aliso Viejo, California-based group Valeant will also get up to $545 million based on the achievement of certain regulatory and commercial milestones and the development of additional indications for retigabine. A Phase II study of the latter in patients with post-herpetic neuralgia, a painful and common complication of shingles, is ongoing.

The firms will co-market the product and share up to 50% of net profits within the USA, Canada, Australia, New Zealand and Puerto Rico, and Valeant will receive up to a 20% royalty on sales elsewhere. They will jointly pay for all global R&D expenses for retigabine, while GSK will completely fund the development of VRX698 and the other back-up compounds. Valeant could receive up to an additional $150 million, depending on how those drugs fare, and will receive double-digit royalties on worldwide sales.

Steve Stefano, senior vice president at GSK’s US NeuroHealth division, said there is a significant need for novel drugs, as almost one-third of patients with epilepsy continue to experience seizures despite treatment with currently available medications”. He added that “we believe retigabine could potentially play a significant role in improving the management of epilepsy and is a welcome addition to GSK’s portfolio”.

Sweden's Meda will also benefit
News of the deal has also raised a smile at Sweden’s Meda, which recently bought a chunk of Valeant’s European operations for $392 million and also announced plans to set up joint ventures with the US firm in Australia, Canada and Mexico.

Meda noted that it is entitled to receive “significant royalties and certain milestone payments” from the retigabine agreement. Specifically, the Stockholm-based firm is entitled to receive royalties of 7% on sales in the USA, while in Europe, the royalty rate can vary from 6% to 8%, depending on sales and profitability. In other world markets, the royalty rate is 3% and Meda is also entitled to receive up to 250 million Swedish kroner, around $39 million, “at certain milestone events that are not linked to sales levels”.