WASHINGTON, April 16, 2012 /PRNewswire/ -- Vanda Pharmaceuticals Inc. (NASDAQ: VNDA), a biopharmaceutical company focused on the development and commercialization of products for central nervous system disorders, announced today that it has acquired an exclusive world-wide license from Eli Lilly and Company (Lilly) to develop and commercialize a small molecule neurokinin 1 receptor (NK-1R) antagonist for all human indications. NK-1R antagonists have been evaluated in a number of indications including chemotherapy-induced nausea and vomiting (CINV), post-operative nausea and vomiting (PONV), alcohol dependence, anxiety, depression, and pruritus. VLY-686 (formerly known at Lilly as LY686017) has demonstrated proof-of-concept in alcohol dependence in a study published by the NIH (1). In that study VLY-686 was shown to reduce alcohol cravings and voluntary alcohol consumption among patients with alcohol dependence. Merck's Emend® (aprepitant) is the only marketed NK-1R antagonist in the United States and is approved for the treatment of CINV and the prevention of PONV. "The licensing of VLY-686 is an important milestone for Vanda, as we continue to realize our vision of developing treatments to address unmet medical needs," said Mihael H. Polymeropoulos, M.D., President and CEO of Vanda. Under the terms of the agreement with Lilly, Vanda will pay an initial license fee of $1.0 million and will be responsible for all development costs. Lilly is also eligible to receive additional payments based upon achievement of specified development and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits. These milestones include $4.0 million for pre-NDA approval milestones and up to $95.0 million for future regulatory approval and sales milestones. In 2012, Vanda intends to initiate and complete the technology transfer activities and further examine the clinical and commercial profile of VLY-686. This strategic evaluation will further inform potential indications for an early development clinical program.