Biogen Idec has signed a deal worth up to $220 million to develop a treatment of hyponatremia in patients with congestive heart failure with privately-held pharmaceutical company Cardiokine.

The companies will collaborate on lixivaptan, a selective V2 vasopressin receptor antagonist which has demonstrated promising activity in treating hyponatremia, an imbalance of sodium and water in the body. Lixivaptan works by causing water to be excreted from the kidney, without affecting sodium or other electrolytes and the compound is expected to enter a Phase III trial later this year.

In terms of the financial side of the deal, Biogen will pay Cardiokine $50 million upfront and $170 million in additional milestone payments for successful development and commercialisation of the drug, as well as royalties. The biotech major will also be responsible for the global commercialisation of lixivaptan, though Cardiokine will have an option for limited co-promotion in the USA.

"With this late-stage oral compound, we continue to leverage our global development and specialty market expertise to grow our business and broaden our therapeutic focus,” said Biogen chief executive James Mullen, who added that “an effective treatment for hyponatremia could be beneficial to patients with a variety of diseases, including heart failure". It is estimated that the incidence of hyponatremia in hospitalised patients in the USA is greater than one million.

– Biogen also revealed that it has completed a $3 billion share repurchase through a modified ‘Dutch auction’ tender offer for about 16.4% of its outstanding common stock. The offer led to the repurchase of just over 56.4 million shares at $53 each, and to finance the transaction, Biogen said it will borrow $1.5 billion through a loan agreement with Merrill Lynch and Goldman Sachs.