Lexicon Pharmaceuticals said today it has acquired from Bristol-Myers Squibb (BMS) exclusive rights to a preclinical candidate for neuropathic pain that is expected to enter Phase I studies in 2017 and was developed through the company’s alliance with the pharma giant.

The acquisition could generate as much as $115.5 million-plus for BMS.

Under the deal, Lexicon said, it bought exclusive research, development, and commercialization rights to the orally administered small-molecule compound LX9211 (BMS-986176), as well as additional small-molecule compounds acting through the same target as LX9211.

According to Lexicon, LX9211 has shown “robust” efficacy in preclinical models of neuropathic pain, where it was also well tolerated at and above efficacious doses in animals.

“With the nearing completion of IND-enabling studies, we are planning to advance LX9211 into the clinic next year so that patients in an area of high unmet need can benefit from this innovation,” Praveen Tyle, Ph.D., Lexicon's evp of R&D, said in a statement.

Lexicon disclosed in a regulatory filing that it has agreed to pay BMS up to $34.5 million in total payments tied to achieving development and regulatory milestones for LX9211’s first indication, starting with the commencement of the first Phase II clinical trial, and up to $16 million in development and regulatory milestone payments for each of the second and third indications, if applicable.

Lexicon has also agreed to pay single-digit royalties on worldwide net sales and up to $40 million tied to achieving sales performance milestones.

For the additional small-molecule compounds, Lexicon has agreed to pay BMS up to $25 million in milestone payments for the first product developed to act on a specific target. The payments start with $1.5 million for an IND filing, then $2.5 million for the start of a Phase II trial, $5 million each for the start of a Phase III trial and an NDA filing, $2.5 million for a marketing authorization application with the European Medicines Agency, and $8.5 million upon NDA or MAA approval, whichever is first to occur.

For each subsequent candidate acting on a target, Lexicon will make milestone payments to BMS equal to half of the amount for the first candidate or up to $12.5 million.

Lexicon and BMS launched their neuroscience drug discovery collaboration in 2003. The collaboration was originally set to generate for Lexicon up to $116 million-plus, of which $36 million was to be paid upfront.

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