GSK in insomnia drug deal with Actelion

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By Sam Cage and Sven Egenter

ZURICH (Reuters) - Europe’s biggest drugmaker GlaxoSmithKline could pay up to 3.3 billion Swiss francs (1.6 billion pounds) for a licensing deal on a promising insomnia drug from Swiss company Actelion .

Glaxo beat many of the world’s largest pharmaceuticals companies to partner Actelion’s experimental sleeping pill almorexant and the deal sent the Swiss biotech’s stock soaring nearly 10 percent on Monday.

"The deal terms already allow significant value to be transferred to shareholders," said Landsbanki Kepler analyst Denise Anderson.

Glaxo, which like other big drugmakers is keen to snap up promising new medicines to bolster its pipeline, had been tipped as a likely partner for almorexant, currently in late-stage clinical development.

But some analysts had questioned whether it would go for the deal as it has the only other similar drug in clinical development, on hold in mid-stage trials.

Almorexant is part of a class of drugs known as orexin antagonists which are designed to block receptors for brain chemicals that maintain wakefulness and regulate the sleep-wake cycle.

The drug is a major part of Actelion’s strategy to cut its dependence on key drug Tracleer, which treats a rare heart and lung disorder and rakes in more than $1 billion (503.4 million pounds) .....continued below

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Kepler’s Anderson sees first late-stage results for almorexant in the second half of 2009 and launch in late 2011.

By 8:20 a.m., Actelion shares were 6.3 percent higher at 55.90 francs. Glaxo shares rose 1.5 percent to 1,209 pence.

Glaxo will pay 150 million francs upfront, plus milestones, for exclusive global rights to co-develop and co-commercialise almorexant. The deal does not include Japan.

Actelion will continue to lead its development programme, with Glaxo meeting 40 percent of the costs.

Actelion -- which had previously said seven of the world’s top 10 drugmakers discussed partnering the medicine -- will be eligible for up to 415 million francs in milestone payments for the drug’s development in insomnia.

It could receive up to 2.735 billion francs more, depending on almorexant’s progress in other illnesses that have yet to be evaluated in clinical trials.

Costs and profits from the collaboration will be shared between the two companies.

(Editing by Will Waterman and Erica Billingham)