GlaxoSmithKline has signed a $405 million deal with Vertex Pharmaceuticals, including $20 million in upfront fees, to license a novel pain treatment that is still in preclinical development.

GSK gains exclusive worldwide rights to the drug, called VX-409, which is a subtype selective sodium channel modulator for the treatment of neuropathic pain, as well as follow-up compounds in the same class.

Vertex could receive up to an additional $385 million in development and sales threshold milestone payments based on the development of VX-409 and back-up compounds, and GSK will also pay Vertex royalties on annual net sales.

This is another example of a pharma company paying a large sum of money to license a compound that, while promising, is still a risky proposition in very early-stage development. Earlier this month, Novartis signed a $520 million deal, including $25 million upfront, for a cancer drug developed by Astex that is still in preclinical development, while Roche inked a similar deal - $530 million and $25 million upfront – for an immunosuppressant developed by BioCryst and in Phase I testing.

VX-409 is orally bioavailable, highly active and has exhibited a good safety profile in nonclinical models of both neuropathic and inflammatory pain, according to GSK. Clinical development of the compound is expected to start in 2007.

GSK noted that worldwide prescription drug sales for the treatment and management of pain were more than $20 billion in 2004, and are projected to grow at an estimated 10% a year through 2008.