Novartis is selling the global rights to its skin treatment Elidel to Meda for $420 million, while in turn the Swedish group is granting a US licence for the therapy to Valeant Pharmaceuticals International.

In terms of the deal with the Swiss major, Meda will make an upfront cash payment of the aforementioned sum to get the worldwide rights to Elidel (pimecrolimus), which is used to treat mild to moderate atopic dermatitis. Novartis said the deal reflects its strategy "to focus commercialisation on new launch portfolio and core brands".

Elidel was approved in the USA in 2001 and in the European Union in 2002 and Meda will assume global manufacturing within three years after the deal closes. The Solna-headquartered group noted that Elidel is approved and sold in more than 90 countries worldwide, with turnover of around $120 million and "attractive profitability".

Meda went on to say that Elidel has been studied in more than 60,000 patients and preliminary data suggest it can be effective in the treatment of other dermatological conditions, an opportunity it will pursue. The company added that the therapy is protected by several patents covering substance, formulation and manufacturing processes until 2025.

As soon as the agreement was announced, Valeant said that it had received "a commitment in principle" to license Elidel from Meda in the USA, Canada and Mexico. Terms of that pact will be disclosed after the parties have executed a definitive agreement and Valeant chief executive Michael Pearson said "we are pleased to add this strong worldwide brand to our growing dermatology product portfolio".