AIM-LISTED GW Pharma has agreed a deal to allow Swiss giant Novartis to market its cannabis-based medicines in new markets, to treat muscle disorders in multiple sclerosis patients.
The tie-up means that Novartis will have exclusive rights to sell GW’s Sativex drug in Australia and New Zealand, plus across parts of Asia, the Middle East and Africa.
Novartis will pay GW $5m (£3.06m) upfront, followed by a series of additional payments totalling $28.75m based on milestones under the terms of the deal.
Already licensed for treatment in the UK, Spain, Canada and New Zealand, Sativex is awaiting approval in several European countries, with licences expected to be granted later this year.
The drug is used to treat the muscle spasms and stiffness common among MS sufferers, and has been developed from active ‘cannabinoid’ ingredients found in the Cannabis Sativa plant.
Shares in GW rose more than 12 per cent following the deal announcement, valuing the company at £141.5m.
“Novartis has emerged at the forefront of the next generation of MS treatments, and is therefore ideally positioned to market Sativex as a symptomatic treatment alongside their disease modifying treatment,” GW’s managing director Justin Gover said.
GW specialises in cannabis-based medicines, and reported a pre-tax profit of £4.6m for 2010.