Merck & Co has signed a deal with Japan’s Sumitomo Pharmaceuticals, which gives it an exclusive license to SM13496 (lurasidone), an atypical antipsychotic that the latter company is developing for the treatment of schizophrenia.

The license, which covers all parts of the world except for Japan, China, Korea and Taiwan, entitles Sumitomo an undisclosed initial payment as well as future milestones and royalties on net sales. The Japanese company also retains the option to co-promote the product in the all-important US market.

“We believe SM13496 has the potential to be a new therapeutic option for physicians in the treatment of schizophrenia, one of the world’s most disabling severe mental illnesses,” said Peter Kim, president of Merck’s research laboratories.

“We are delighted about this agreement with Merck, which has the potential to expedite the development and commercialisation of this promising compound,” said Yasuo Okamoto, president of Sumitomo Pharmaceuticals, adding: "We believe this partnership will provide us with opportunities to reinforce our operations in the United States."

SM13496, which is currently undergoing Phase II testing, has shown antipsychotic efficacy and appears to be generally well tolerated relative to existing antipsychotics in early-stage trials.