Swiss drug giant Novartis has acquired exclusive global right’s to group NexMed’s NM100060, a nail lacquer treatment for onychomycosis, more commonly known as nail fungus, for a total of up to $51 million.

Under the terms of the deal, Novartis will assume all further development, regulatory, manufacturing and commercialization responsibilities as well as expenses. In return, NexMed, a developer of innovative transdermal treatments based on its drug delivery technology NexACT, expects to receive up to $51 million in upfront and milestone payments on the attainment of specific development and regulatory milestones, which includes an initial cash signing fee of $4 million. In addition, NexMed is eligible to receive royalties based upon the level of sales achieved.

NexMed's proprietary anti-fungal lacquer NM100060, which is currently in Phase I evaluation in the USA, combines NexACT penetration enhancers with terbinafine, the active ingredient in the Swiss group’s blockbuster anti-fungal drug Lamisil.

The move seems marks a good step for NexMed, as the development of the agent should accelerate with the support of a pharmaceutical major. Commenting on the deal, chief executive Joseph Mo, stated: “Novartis is a leader in the treatment of onychomycosis and we are delighted by the opportunity to license NM100060 to such a committed partner.” He went on to say that, “this agreement further validates our business strategy of partnering with large pharmaceutical companies.”

Onychomycosis affects the toenails and/or fingernails and currently represents one of the most common dermatological diseases in the USA, affecting around 30 million Americans, according to NexMed. A 1998 American Journal of Dermatology report estimated that the total annual cost of nail fungus monitoring and treatment falls between $700-$1,200 per patient, and the current market is estimated to be around $2 billion worldwide, the group noted.