LONDON — Development company Vanguard Medica Group plc has agreed to an exclusive U.S. sales and distribution license with Elan Corp. plc, of Dublin, Ireland, for its lead compound, frovatriptan for the treatment of migraine. The deal comes as a relief for Vanguard, after London-based SmithKline Beecham plc, the discoverer of the compound, declined in May to take up the right to license it back.
Under the terms of the deal, Elan will invest US$10 million in new ordinary Vanguard shares at £6.25 per share, equivalent to 3 percent of the current share capital. The terms also include milestone payments of up to US$50 million and royalties on future sales. The first milestone will be triggered when the deal receives regulatory approval; other milestones include the filing — and the approval — of the NDA for the drug, which has completed Phase III. Vanguard said all the milestones will fall within the next three to four years.
SmithKline, of London, cited a "conflict of priorities" on the time frovatriptan would require marketing and sales force support as its reason for not proceeding with the drug. It will be entitled to royalties on net sales.
Robert Mansfield, CEO of Vanguard, said discussions are progressing with other companies for the commercialization of frovatriptan in other markets. "Over the past five months, in discussions with a range of companies, we have become convinced that we should select the best qualified partner for the major markets."
Shares in Vanguard, of Guildford, Surrey, revived when the deal was announced Oct. 9, picking up £0.075 to close at £2.60. However, for the week as a whole, the stock fell by 6 percent. Before the announcement in May that SmithKline would not be commercializing frovatriptan, the share price was over £5.80.
Frovatriptan, a serotonin (5HT) agonist, has completed pivotal Phase III trials, and Vanguard expects to file a new drug application for the acute treatment of migraine early in 1999. Details of the Phase III data have not been published, but Vanguard believes the drug has a distinctive profile. The company says that a significant number of the 20 million migraine sufferers in the U.S. are not adequately treated by current therapies.
Elan will market frovatriptan through its pharmaceuticals division, which specializes in products and services for the diagnosis and treatment of neurological diseases and disorders, acute care and pain management. The division has more than 300 sales representatives in the U.S.
Donal Geaney, CEO of Elan, said migraine is "the most common complaint treated by neurologists, and frovatriptan is a natural candidate to lead our headache and pain management franchise."
Vanguard will be responsible for the manufacture and supply of frovatriptan. The company, set up in 1991 by ex-SmithKline employees, took over development of frovatriptan in 1994, when it was at the preclinical stage. More than 3,400 patients in 17 countries have taken part in the Phase III trial, which started at the beginning of 1997. *