Valeant and Metabasis will split proceeds.

Valeant Pharmaceuticals and Metabasis Therapeutics signed definitive agreements for the assignment and license of development and commercial rights to pradefovir to Schering-Plough. The transaction is expected to close in the first quarter of 2007.

Valeant licensed pradefovir from Metabasis in 2000 and has been conducting clinical trials to evaluate the safety and efficacy of pradefovir for the treatment of compensated chronic hepatitis B. Pradefovir is a pro-drug of PMEA, an antiviral compound that uses Metabasis’ HepDirect® technology to enable higher concentrations of the drug in the liver, the primary site of replication for the hepatitis B virus and lower concentrations elsewhere.

Under the terms of the agreements, Schering-Plough will make an upfront payment of $19.2 million to Valeant and $1.8 million to Metabasis. The company will also pay up to $65 million to Valeant and $25 million to Metabasis based on certain development and regulatory milestones. Schering-Plough will also pay royalties to both firms in the event that pradefovir is commercialized.

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