Teva Pharmaceutical Industries will develop and market Xenon Pharmaceuticals’ clinical-stage pain treatment XEN402 worldwide, as the generic drug giant seeks to expand its branded portfolio of drugs for pain and CNS indications.

In return, under its collaborative development and exclusive worldwide license agreement, Teva will pay Xenon $41 million upfront, plus up to $335 million tied to undisclosed development, regulatory, and sales-based milestones.

Xenon will also receive royalties payable on sales, and retain an option to participate in commercialization in the U.S. under the collaboration with Teva, its seventh with a larger biopharma partner.

“Teva is building a focused pipeline of novel medicines in select areas of medical need. XEN402 fits this strategy,” Jeremy M. Levin, D.Phil, Teva’s president and CEO, said in a statement. “It holds the potential to address the significant unmet medical need for the many patients who suffer from chronic pain. In addition, XEN402 has the potential for broader therapeutic use across other pain conditions.”

XEN402 treats pain by blocking the Nav1.7 and Nav1.8 sodium channels found in sensory nerve endings, which can increase in chronic painful conditions. In a study published January 2012 in the journal Pain, an oral form of the drug was shown to be effective at relieving the pain associated with erythromelalgia. And, in a 2011 Phase II trial of the treatment’s effectiveness in alleviating pain from post-herpetic neuralgia, topical XEN402 delivered greater clinically meaningful reductions in pain than placebo.

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