Biovail enters into an agreement with Santhera to develop and market JP-1730/fipamezole drug

Biovail Corporation (NYSE:BVF) (TSX:BVF) today announced that its subsidiary, Biovail Laboratories International SRL (BLS), has entered into an agreement with Santhera Pharmaceuticals (Switzerland) Ltd., a subsidiary of Santhera Pharmaceuticals Holding AG (SIX: SANN) to acquire the U.S. and Canadian rights to develop and commercialize Santhera’s JP-1730/fipamezole for the treatment of Dyskinesia in Parkinson’s Disease (DPD). JP-1730/ fipamezole is a first-in-class compound that, in a recent Phase IIb study, displayed the potential to reduce levodopa-induced dyskinesia.

Bill Wells, Biovail’s Chief Executive Officer said, “This agreement with Santhera is directly on strategy and another important step in our efforts to build a sustainable product-development pipeline in specialty central nervous system disorders.”

“Biovail is an emerging key player in the area of neurodegenerative disorders. With its commitment to this therapeutic area and the strong track record it has developed in a short period of time, I am confident that JP-1730/fipamezole will become a key product for the improved management of Parkinson’s disease,” said Klaus Schollmeier, Chief Executive Officer of Santhera.”

Under the terms of the agreement, which covers only the U.S. and Canada, and subject to customary closing conditions, Biovail will make an upfront payment of $8 million, a further payment of $4 million upon the successful closing of Santhera’s acquisition of Oy Juvantia Pharma Ltd., and will pay up to $35 million in potential development and regulatory milestones associated with the initiation of a Phase III study, regulatory submissions and approvals of JP-1730/fipamezole in DPD. The agreement also stipulates that Biovail make additional milestone payments of up to $145 million as certain sales thresholds are met. Biovail will also make royalty payments of 8% to 15% on net commercial sales of JP-1730/fipamezole.

Should Biovail pursue a second indication, up to $20 million in additional success milestones would be payable to Santhera upon approval.

Biovail will be responsible for the remaining clinical development programs and costs in the U.S. and Canada. The companies have agreed to collaborate on the development program. Santhera will have the right to use and sublicense data generated for development and commercialization purposes outside of North America. Initiation of the first Phase III study in the U.S. is scheduled for 2011. Santhera will retain co-promotion rights in the U.S.