Neurocrine biosciences and xenon pharmaceuticals announce agreement to develop first-in-class treatments for epilepsy

Neurocrine biosciences, inc. and xenon pharmaceuticals inc. announced a license and collaboration agreement to develop first-in-class treatments for epilepsy. neurocrine biosciences gains an exclusive license to xen901, a clinical stage selective nav1.6 sodium channel inhibitor with potential in scn8a developmental and epileptic encephalopathy (scn8a-dee) and other forms of epilepsy, including focal epilepsy. in addition, neurocrine biosciences gains an exclusive license to pre-clinical compounds for development, including selective nav1.6 inhibitors and dual nav1.2/1.6 inhibitors. the agreement also includes a multi-year research collaboration to discover, identify and develop additional novel nav1.6 and nav1.2/1.6 inhibitors. under the terms of the agreement, neurocrine biosciences will be responsible for development costs associated with the programs and the agreement will be subject to the following terms: upfront license payment: xenon will receive $50 million, including a $30 million upfront payment in cash and a $20 million equity investment by neurocrine biosciences at a xenon per share price of $14.196. xen901 investigational new drug (ind) milestone: xenon will receive up to $25 million upon the u.s. food and drug administration (fda) acceptance of an ind for xen901, with 55% of the amount in the form of an equity investment in xenon at a 15% premium to xenon's 30-day trailing volume weighted average price at that time. collaboration milestones: xenon may also be entitled to receive up to approximately $1.7 billion in additional development, regulatory and commercial milestone payments related to xen901 and other licensed nav1.6 or nav1.2/1.6 inhibitor products. xen901 royalties: xenon will have the right to receive a tiered royalty ranging from the low double-digits to mid-teen percentage in the u.s. and a tiered royalty at slightly lower rates outside the u.s. based upon aggregate global net sales. other product royalties: xenon will have the right to receive a tiered royalty for other nav1.6 and nav1.2/1.6 inhibitor products ranging from the mid-single to low double-digits in the u.s. and a tiered royalty at slightly lower rates outside the u.s. based upon aggregate global net sales. xenon co-fund option: xenon retains an option to co-fund 50% of the u.s. development costs of xen901 or another product candidate in exchange for increased u.s. royalties, reaching 20% of u.s. net sales at the higher royalty tier for xen901. funded collaboration: neurocrine biosciences will fund all clinical developments costs associated with the development of product candidates under the collaboration (subject to xenon's co-fund option) and will also fund a research collaboration up to 3 years with a minimum of 10 ftes (full time equivalents) at xenon. xenon will be responsible for certain pre-clinical and a portion of certain near term manufacturing costs under the collaboration.
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