Vanda (VNDA) and Novartis (NVS) to Develop Fanapt in US and Canada

October 13, 2009 6:52 AM EDT

Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA) reported its entry into an exclusive agreement with Novartis Pharma AG (NYSE: NVS) to commercialize and develop Fanapt (iloperidone) in the U.S. and Canada, announcd Titan Pharmaceuticals.

Fanapt, an atypical anti-psychotic, was approved by the U.S. Food and Drug Administration earlier this summer for the acute treatment of schizophrenia in adults. The U.S. anti-psychotic market is approximately $14 billion a year.

Under the agreement, Vanda will receive an upfront payment of $200 million and will be eligible for additional payments totaling up to $265 million upon the achievement of certain development and commercial milestones for Fanapt in the U.S. and Canada. Vanda will also receive royalties on the U.S. and Canadian net sales of Fanapt. The consummation of the transaction is subject to the receipt of customary regulatory approvals, which are expected by the end of 2009.

Vanda completed Phase III clinical trials in 2006 and gained US regulatory approval for this medicine in May 2009.

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