US group Allergan has entered into a long-term agreement with UK drug giant GlaxoSmithKline to develop and market its Botox (botulinum toxin type A) in Japan and China, and to co-promote GSK’s migraine drugs Imitrex STATdose system (sumatriptan succinate) and Amerge (naratriptan hydrochloride) to neurologists in the USA. No financial details of the deal were disclosed.

As part of the agreement, GSK has gained all clinical development and commercial rights to Botox in Japan and China, markets in which the UK firm has robust resources as well as expertise in neurology, Allergan noted. In return, Allergan will receive an upfront fee, R&D and marketing support payments and royalties on product sales in the said territories. In addition, the firm will manufacture Botox for GSK under a long-term supply arrangement, and will work with the firm on new clinical development for the drug as well as strategic marketing in those markets. The US group has also obtained the right to co-promote GSK’s Imitrex STATdose System and Amerge in the USA for a five-year period.

Commenting on the deal, David Pyott, chairman, president and chief executive of Allergan, stated that the move fulfills two strategic aims for the firm. He explained: “First, Japan has unique regulatory requirements that are different from the rest of the world, as well as distinct reimbursement and commercialisation challenges. Second, the co-promotion of GSK’s Imitrex STATdose system and Amerge in the US fulfills our strategic goal of expansion in the key neurology market and allows us to gain valuable expertise in the headache/migraine segments as we enter into Phase III clinical trials exploring the use of Botox for the treatment of chronic daily headache."

The transaction is expected to be accretive to Allergan's earnings in the foreseeable future, although much of this will be reinvested into the business, the company said. Much of the income generated from the deal will be injected into doubling the size of the firm’s US neurology sales organisation, as well as additional funding to support the company’s R&D pipeline.

Although the general feeling among industry observers is that the move signals the Allergan’s confidence in expanding Botox into the migraine market, shareholders failed to show much enthusiasm on the news. The stock closed down 1.1% to close at $90.55 on October 3, the day of the announcement.