ACADIA (ACAD) Jumps On Biovail (BVF) Parkinson's Collaboration

May 4, 2009 8:44 AM EDT

Shares of ACADIA Pharmaceuticals Inc. (Nasdaq: ACAD) are higher this morning after the company announced it has established a collaboration with Biovail Laboratories International SRL, a subsidiary of Biovail Corporation (NYSE: BVF), to co-develop and commercialize pimavanserin, ACADIA's proprietary and selective 5-HT2A inverse agonist, in the United States and Canada.

ACADIA retains rights to pimavanserin in the rest of the world. Pimavanserin is a new chemical entity (NCE) currently in Phase III development as a treatment for Parkinson's disease psychosis.

Under the terms of the collaboration, ACADIA is entitled to receive aggregate payments, excluding royalties, of up to $395 million. These include an upfront cash payment of $30 million, up to $160 million in potential milestone payments associated with the successful completion of clinical trials, regulatory submissions and approvals of pimavanserin for PDP and ADP, up to $45 million in potential milestones should the parties pursue a third indication, and up to $160 million in potential milestones as certain sales thresholds are met. ACADIA also will be entitled to receive a 15 percent royalty on annual net sales of pimavanserin up to $100 million and a 20 percent royalty on annual net sales over $100 million. In addition to product royalties, ACADIA has the option to co-promote pimavanserin in the United States. Biovail will be responsible for all future costs associated with the development, manufacturing, and commercialization of pimavanserin in all indications with the exception of specified ongoing PDP studies, which will continue to be funded by ACADIA.

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