UPDATE 2-Biovail, Santhera strike Parkinson's drug deal

* Biovail to pay $8 mln up front

* Could pay up to $184 mln more in milestones

* Santhera shares rise 2.6 pct

* Biovail shares drop 0.5 pct (Adds comment and background, updates share prices; in U.S. dollars unless noted)

ZURICH/TORONTO, Aug 24 (Reuters) -- Biovail Corp BVF.TO BVF.N struck a deal with Swiss biotech Santhera (SANN.S) on Monday, over a drug to treat dyskinesia in Parkinson's disease, marking the Canadian drugmaker's third significant purchase in the field of central nervous system treatments.

Biovail will make an upfront payment of $8 million to Santhera and could pay up to $184 million more depending on the progress of the drug JP-1730/fipamezole to market. It will also pay royalties of 8 percent to 15 percent on sales for the U.S. and Canadian rights to develop and commercialize the drug.

Santhera shares were up 2.6 percent at 27.60 Swiss francs. Biovail shares were off 0.5 percent at C$14.70 on the Toronto Stock Exchange.

Dyskinesia can appear as Parkinson's disease progresses, and causes sudden uncontrollable movements of limbs, face, tongue and body. Some 400,000 patients in Europe and North America are affected by dyskinesia associated with Parkinson's therapy, Santhera said.

The market for JP-1730/fipamezole is seen in the range of $200 million to $400 million a year, analysts said.

"This is another good acquisition, building the pipeline with the the right franchise," said Claude Camire, an analyst at Paradigm Capital in Toronto.

Last year, Biovail announced a shift in its focus to central nervous system treatments and away from controlled-release products.

Since then it has made a string of acquisitions and licensing deals, including the $100 million purchase of U.S.-based Prestwick, which holds the Canadian and U.S. rights to Xenazine, a drug used to treat chorea, an ailment associated with Huntington's disease.

TOUGH YEAR FOR SANTHERA

It has been a tough year for Santhera after its lead drug Catena, also known as idebenone, missed its main aim in a late-stage trial in Friedreich's ataxia, a hereditary disease that damages the nervous system, and the stock has lost nearly 30 percent of its value since January.

"We see the (Biovail) deal as a positive development for Santhera as it represents an effort to diversify from being exposed to the success of idebenone alone," said Vontobel analyst Andrew Weiss.

Santhera has posted positive mid-stage trial results on JP-1730/fipamezole and had said it aimed to partner the drug this autumn. [ID:nLH353559]

($1=$1.07 Canadian)

($1=1.06 Swiss francs) (Reporting by Sam Cage in Zurich and Scott Anderson in Toronto, editing by Will Waterman and Rob Wilson)