Roche and Vernalis announce new collaboration in depression and anxiety
14 May 2002
New joint research collaboration will develop innovative medicines to treat two of the most common disorders of the central nervous system
Roche and Vernalis (LSE: VER) today announced a major new strategic collaboration to discover and develop new drugs for the treatment of depression and anxiety. This programme represents an entirely new approach to the treatment of psychiatric disorders aimed at overcoming current limitations in this therapeutic area such as slow onset of action and side effects that cause patients to discontinue treatment. Depression is one of the most common mental health problems and affects around 19 million people annually in the US alone.
Under the terms of this agreement, Roche has an option to license worldwide rights to develop and commercialise compounds arising from Vernalis' research and development programmes. The option is exercisable up to the completion of Phase I studies. Roche will pay Vernalis an annual option fee and additional sums on the achievement of key milestones during the option period. Upon exercise of the option, the parties will establish a joint research collaboration, under which Roche will provide research funding to Vernalis to identify and bring forward further product candidates for development. Roche will conduct all the further development of the first and any subsequent product candidates and will make a series of payments to Vernalis on the achievement of agreed pre and post approval milestones that could total up to US$80 million. Roche will have exclusive rights to commercialise all products arising from this agreement in the fields of depression and anxiety, and Vernalis will receive royalties on worldwide sales. If Roche does not exercise its option, Vernalis will retain all rights in the programme.
Roche has also made a loan to Vernalis of £7 million, convertible into Vernalis ordinary shares at a conversion price of 329p per share. If not converted the loan is repayable after five years.
"We are pleased to be collaborating with Vernalis on a programme in this very exciting area that has the potential to bring a new class of antidepressant to the market", stated William M. Burns, Global Head of the Pharmaceutical Division at Roche. "This collaboration represents another example of Roche's ability to identify and make a strategic investment in a biotechnology company with excellent science and the potential to deliver new products for currently unmet medical needs."
Commenting on the announcement, Robert Mansfield, Chief Executive of Vernalis, said: "This new agreement is a further strong validation of the quality of our science and of the excellent working relationship we have now developed with Roche through our existing collaborations in obesity and diabetes."
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