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GEN News Highlights : Nov 15, 2006

GSK and NeuroSearch Enhance Scope of Alliance

The distribution of work, risk, and reward has been re-evaluated.

GlaxoSmithKline (GSK) and NeuroSearch agreed to expand the scope of the current five-year strategic alliance within CNS and ion channel drug discovery and development. The terms of the agreement include a change in the distribution of work, risk, and reward between the two parties. The new deal will also increase the exploitation of NeuroSearch’s ion channel platform to include non-CNS indications. In addition, it sets up a new equity structure under which NeuroSearch can sell shares to GSK for up to EUR 30M.

For selected drug candidates, NeuroSearch will be responsible for the transition of product candidates from research to development and the early clinical development until completion of Phase IIa in the future. GSK will be responsible for the late-stage development, production, and marketing.

GSK milestone payments will commence at the start of Phase I studies thereby ensuring early financing from GSK as well as financial upside to NeuroSearch. For products where NeuroSearch successfully completes the development until phase IIa, NeuroSearch will receive EUR$109 million in development milestones and double-digit royalties of GSK net sales. Under the expanded alliance GSK will maintain its financial obligations existing from the original collaboration agreement.