Vernalis has received a cash boost from partner Novartis which is progressing one of the UK’s oncology treatments into mid-stage trials.

The company is getting a $3 million milestone which has been triggered by the first dosing in a Phase II trial of AUY-922, an Hsp90 inhibitor, “in a range of solid tumours”. Chief executive Ian Garland said Vernalis is looking forward to the results of the proof-of-concept study “which Novartis has indicated are targeted for 2010”.

The two companies are also collaborating on another Hsp90 inhibitor, called HSP990, which is being investigated in Phase I trials in solid tumours. The link-up was signed in 2004 and the Swiss major has a stake in the Winnersh-headquartered group.

News of the Novartis milestone pushed up Vernalis shares, making up the decline suffered when the company announced that it is making a one-off payment of almost $33 million to equity fund Paul Capital Healthcare to regain 100% of the royalty stream from Menarini’s sales of the migraine drug Frova (frovatriptan).