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GEN News Highlights : Apr 17, 2008

GSK to Pay Regulus $20M Upfront in Inflammatory Disease Deal

Regulus could make an additional $578 million in milestone fees for four miRNA-based drugs.

Regulus Therapeutics stands to earn over $598 million through a deal with GlaxoSmithKline (GSK) related to inflammatory diseases. For $20 million upfront, the firms have agreed to work together to discover, develop, and market miRNA-targeted treatments for diseases like rheumatoid arthritis and inflammatory bowel disease.

Under the strategic alliance, GSK has the option to exclusively license compounds directed at four miRNA targets for commercialization on a worldwide basis. Regulus will carry out discovery work and take drugs through completion of clinical proof of concept, unless GSK chooses to exercise its option earlier. Regulus will retain the rights to any candidates that are not chosen by GSK.

The initial $20 million payment includes a $15 million option fee and a $5 million note that will convert into Regulus common stock in the future under certain specified circumstances. Regulus is also eligible to receive up to $144.5 million in development, regulatory, and sales milestone fees for each of the four therapeutics. The company will also make tiered royalties up to double digits on worldwide sales of products.