Partnering a promising preclinical pain product, Vertex Pharmaceuticals Inc. granted GlaxoSmithKline plc worldwide development and commercialization rights in a deal worth up to $405 million plus royalties.

The agreement includes a license to Vertex's most advanced subtype selective sodium channel modulator, VX-409, which GSK anticipates bringing into the clinic in 2007. London-based GSK has several compounds in development for pain and other neurological conditions, and its popular migraine drug Imitrex (sumatriptan) first reached the U.S. market in 1993.

For Cambridge, Mass.-based Vertex, the partnership not only grants a clinical future for a preclinical drug, it also gives the company significant funds for other pipeline products.

"In the immediate term, it provides us with $20 million in up-front payments, which we will recognize as revenue this year," said Michael Partridge, the company's director of corporate communications. "And [it] provides for us the ability to achieve milestones as the compound progresses through development."

Those milestones could bring Vertex an additional $385 million, the majority of which are based on meeting certain development goals of VX-409 and backup compounds for a range of indications. Some milestones are tied to the achievements of certain sales thresholds, and would be paid over and above royalties on annual net sales. The companies are not disclosing the royalty rate.

Vertex believes the platform that has produced VX-409 has the potential to produce other compounds that target the sodium channel family. Designing subtype selective ion channel modulators has been a challenge for researchers who lack high-throughput assays and other ways to assess the compounds.

"What Vertex has done based on proprietary technology that was acquired [when we bought] Aurora Biosciences in 2001," Partridge said, "is to develop state-of-the-art approaches for conducting ion channel drug discovery selectively and in a high-throughput fashion, and obtaining high throughput without losing sensitivity."

VX-409 is the first and might be the only agent that targets a specific sodium channel subtype for treating pain, Partridge said. Specific sodium channels are involved in transmitting pain signals to the central nervous system. VX-409 has exhibited a good safety profile, is orally bioavailable and is highly active in models of neuropathic and inflammatory pain. It was discovered through ion channel work at Vertex's San Diego facility.

Inflammatory pain affects an estimated 14 million people in the U.S., while neuropathic pain affects about 3 million people. In 2004, the worldwide prescription drug market for treating and managing pain was $20 billion, a figure that is expected to grow 10 percent a year through 2008.

"Based on this announcement [Tuesday], you can see that Vertex and GSK share a view of the very large clinical and commercial potential of a drug like VX-409," Partridge said.

This is not the first time that the companies have worked together.

"We have a collaboration with GSK in HIV dating back to 1993," Partridge said, "and that collaboration has produced three compounds, two of which made it to the market and one of which is in Phase II."

The approved compounds, Agenerase and Lexiva/Telzir, are protease inhibitors marketed by GSK for HIV infection and AIDS. The Phase II compound, VX-385 (brecanivir), also a protease inhibitor, received fast-track designation last summer from the FDA.

Vertex's pipeline includes a variety of other drugs for viral diseases, inflammation and autoimmune diseases and cancer: merimepodib (VX-497) in Phase II for hepatitis C virus (HCV), VX-950 in Phase II for HCV, VX-702 in Phase II for rheumatoid arthritis, VX-765 in Phase II for psoriasis, pralnacasan in Phase II for inflammatory disease, VX-680 and VX-944 in Phase I for oncology, VX-322 in preclinical studies for oncology and VX-692 in preclinical studies for bacterial infection.

Many of the company's drugs are partnered with companies such as Tokyo-based Mitsubishi Pharma Corp. and Whitehouse Station, N.J.-based Merck & Co. Inc., but Vertex has retained the rights to others, like VX-950, believing that the HCV market may be one for which the company could build a small sales force.

"Our strategy is really to leverage our drug discovery platform to produce drugs that have the potential to change the disease treatment paradigm," Partridge said. "Some of those we'll take to market ourselves."

Vertex's stock (NASDAQ:VRTX) rose $1.01 Tuesday to close at $27.26.