RedHill Biopharma Ltd. (TASE: RDHL) is buying the rights to a psychosis treatment from IntelGenx Technologies Corporation (TSX: IGX; Bulletin Board: IGXT) of Canada. The companies are jointly developing a migraine treatment, RHB-103.
The drug is a new formulation of tablets that dissolve in the mouth, which have already been approved for marketing. According to IntelGenx and assessments by RedHill, the drug is in the advanced development stage, after successfully completing a bioequivalence trial (which corresponds to a Phase I/II clinical trial) ahead of a pivotal bioequivalence trial (which corresponds to a Phase III clinical trial) to test the pharmacological similarities between the new formulation and the current drug.
Under the memorandum of understanding between the companies, RedHill will buy an exclusive license to jointly develop and commercialize the new formulation, subject to completing due diligence and signing a detailed agreement. The two companies will jointly develop the drug to treat psychosis before submitting it to the US Food and Drug Administration (FDA) for approval.
After completing the due diligence and signing a detailed agreement, RedHill will pay IntelGenx a $250,000 down payment for the license, and will pay up to $1 million in additional amounts based on development milestones and the obtaining of marketing approval in the US.
RedHill will bear part of the drug's development costs up to $1 million. IntelGenx will have the rights to royalties of 20-50% on sales of the drug by RedHill.
RedHill's share price was unchanged in morning trading at NIS 3.02, giving a market cap of NIS 156 million.
Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2011
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