GW Pharmaceuticals has signed a deal with Japan’s Otsuka Pharmaceutical Co, which will see the latter develop and market the UK firm’s lead product Sativex, a cannabis-based spray, in the USA.

Under the terms of the agreement, GW could receive total milestone payments to GW of up to $273 million as well as a long-term commercial supply price and royalty. Otsuka will shell out an initial signature fee of $18 million and will bear the costs of all US development activities for Sativex in the treatment of cancer pain, additional indications and future formulations.

The companies added that they are also in detailed discussions with a view to entering into a cannabinoid research collaboration in the field of central nervous system disorders and cancer treatment.

In 2006, the US Food & Drug Administration permitted Sativex to enter directly into late-stage development for the treatment of pain in patients with advanced cancer that has not been adequately relieved by opioid medications. GW and Otsuka currently plan for the first US pivotal efficacy clinical trial to be a Phase II/III cancer pain dose-ranging study, which is due to commence this year.

Sativex has only been launched in one market, Canada (by partner Bayer), and that is for the relief of neuropathic pain in adult multiple sclerosis patients. It has suffered a number of delays in the UK but is currently being assessed by regulators in four European countries as a treatment to relieve spasticity in MS.

Geoffrey Guy, GW’s chairman, said the agreement “represents a landmark event in the history of GW. Not only have we secured the development and marketing of our lead product, Sativex, in the world’s largest market, we have also selected a strategic partner that will allow us to extend our cannabinoid pipeline.” He added that Otsuka has an excellent US commercial track record and a world-leading CNS science base.“