Allergan, Sosei's Heptares unit sign $3.3-billion drug development deal for neurological disorders

Allergan agreed to license global rights from Sosei's Heptares Therapeutics unit to a portfolio of subtype-selective muscarinic receptor agonists being developed for the treatment of major neurological disorders, including Alzheimer's disease, under a deal potentially worth up to $3.3 billion, the companies announced.

As part of the agreed terms, Allergan will make an upfront payment of $125 million to Heptares, with the latter eligible to receive further milestones of up to approximately $665 million related to the development and launch of the first three licensed compounds for multiple indications. In addition, Heptares stands to receive up to approximately $2.5 billion linked to annual sales thresholds of these compounds. The companies added that Heptares is also eligible to receive up to double-digit tiered royalties on net sales of all products resulting from the partnership.

Under the agreement, Allergan will be responsible for the development of licensed compounds upon initiation of Phase IIb studies and for subsequent manufacturing and commercialisation of the products. Allergan is also committing up to $50 million to an R&D programme to be conducted by the companies to advance multiple candidates through mid-stage studies.

Allergan and Heptares noted that the deal covers selective small molecule agonists targeting muscarinic M1 and M4 receptors in the brain, discovered using the latter's StaR technology platform. The portfolio covered under the agreement comprises M1, M4 and dual M1/M4 agonists, including HTL9936 and HTL18318, selective M1 agonists that are currently in Phase I development.

David Nicholson, president of global brands R&D at Allergan said "the Heptares M1 compounds have shown promising results in early development in their ability to selectively target the M1 receptor without also activating the M2 or M3 receptors, which are associated with undesirable side effects."

Shares in Sosei, which acquired Heptares last year for as much as $400 million, rose as much as 21 percent on news of the deal with Allergan. In November last year, Heptares entered a collaboration with Pfizer to develop medicines directed at up to 10 GPCR targets across multiple therapeutic areas.

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