SAN FRANCISCO (AP) ¿ Novartis Pharma AG said Monday it has agreed to pay Vanda Pharmaceuticals Inc. up to $465 million to gain exclusive rights to sell Vanda's schizophrenia drug Fanapt in the U.S. and Canada. The deal amends an earlier agreement between the companies. Under its terms, East Hanover, N.J.-based Novartis, an affiliate of Novartis AG, will be able to distribute an oral tablet form of the drug in both countries. It will also be responsible for clinical development in both countries, such as developing and selling a long-acting injectable form of Fanapt. Rockville, Md.-based Vanda will get $200 million upfront and be eligible for $265 million in additional payments if the drug meets certain development and sales milestones. Vanda will also get royalties from Fanapt net sales in the U.S. and Canada. Vanda will keep the rights to sell Fanapt in an oral and injectable form outside Canada and the U.S. Fanapt is a type of schizophrenia drug referred to as an atypical anti-psychotic. It was approved in May by the Food and Drug Administration. Its potential side effects include weight gain and seizures.
If Novartis chooses, both companies can discuss a co-marketing agreement for the drug in other countries, or Novartis Pharma will get a royalty on net sales of the product. The deal will be finalized once the companies get regulatory approvals, which is expected to happen by the end of the year. Novartis Pharma said it plans to start selling the drug in the U.S. early next year. Vanda shares jumped $2.35, or 20.5 percent, to $13.75 in after-hours trading, having closed earlier up 41 cents, or 3.7 percent, to $11.45. Novartis AG gained 52 cents to close the regular session at $50.62.