Novartis in $375m lung treatment deal

SWISS drugmaker Novartis unveiled one of the biggest-ever deals in the European biotech sector yesterday, taking on an experimental treatment for lung disease from two British firms for up to $375 million.

Vectura Plc and privately-owned Arakis Ltd said Novartis had agreed to develop and commercialise their AD 237 treatment for chronic obstructive pulmonary disease (COPD), which is primarily caused by smoking. Arakis said the lucrative deal took the company one step closer to a stock market flotation.

Each company will receive an initial $15m and could get up to a further $172.5m as clinical, regulatory and commercialisation milestones are passed.

They will also receive an undisclosed level of royalties on sales. AD 237 is currently in Phase II clinical trials. Medicines have to pass three stages of trials in humans before being assessed for approval by regulators.

“It’s interesting but it still has some way to go before we really think about commercialisation prospects,” said Martin Hall, an analyst with stockbroking and asset-management firm Eden Group.

Novartis will develop AD 237 on its own and in combination with its QAB149 treatment for COPD, which is also in Phase II trials.

Vectura chief executive Chris Blackwell said the companies hoped to be able to launch AD 237 as a monotherapy in 2010 and as a combination treatment in 2011.