Vernalis says that it has entered into an agreement to buy privately held fellow UK firm, Ionix Pharmaceuticals, in a deal that values that latter firm at some £12.5 million pounds and gives Vernalis the rights to an investigational pain relief medicine, known as IX-1003.

Under the terms of the deal, Vernalis will issue shares to Ionix’ shareholders that represent around 9% of the enlarged firm’s share capital. Ionix’ shareholders will also receive a £5 million cash payment when IX-1003 wins its first regulatory approval. Completion of the transaction, which is not subject to approval by Vernalis’ shareholders, is expected before the end of the month.

IX-1003 is an intranasal formulation of the opiate analgesic, buprenorphine, for the treatment of acute post-operative pain, which is being developed to provide rapid pain relief whilst potentially reducing some side effects associated with opiates. It has already completed Phase I trials, with Phase II testing set to begin in the second half of the year. It is partnered with Reckitt Benckiser Healthcare, which will pay the development costs for this clinical study.

Commenting on the transaction, Vernalis’ chief executive, Simon Sturge, said: “Ionix is a good strategic fit and adds a clinical programme that has the potential to provide a convenient alternative to other opiate analgesics currently on the market. It gives Vernalis an additional programme with co-promotion rights for our emerging sales and marketing infrastructure in the US. We look forward to co-promoting these products as we continue on our path to become a sustainable, self-funding, R&D-driven biotechnology company.”