* Novartis to sell drug in Australia, Asia, Mideast, Africa
* GW to get $5 mln upfront, plus up to $28.75 mln milestones
* GW Pharma shares up 15.2 percent
(Adds GW MD quote, analyst reaction, updates shares)
By Paul Sandle
LONDON, April 11 GW Pharmaceuticals (GWP.L) has
signed up Novartis NOVN.VX to sell its cannabis-based drug
Sativex in a range of markets, marking a key endorsement for the
treatment from the major Swiss pharmaceutical company.
GW said Novartis will file and market the drug, which has
been approved in some European countries and Canada as a
treatment for spasticity due to multiple sclerosis (MS), in
Australia and New Zealand, Asia -- excluding Japan, China and
Hong Kong --, the Middle East and Africa.
The British firm said on Monday it would receive an upfront
payment of $5 million, plus additional payments totalling $28.75
million based on milestones under the terms of the deal.
Shares in GW were 15.2 percent higher at 110 pence by 0814
GMT, valuing the group at about 145 million pounds ($238
"GW could not have asked for a better partner in these
regions for Sativex," said Peel Hunt analyst Paul Cuddon, who
increased his target price by 11 percent to 178 pence after
factoring in the upfront payment, half of the potential
milestones and a royalty on sales.
Novartis has won FDA and European approval for its disease
modifying multiple sclerosis pill Gilenya, which some analysts
say could become a $3 billion-a-year-plus blockbuster and
dominate the market for the neurological condition.
"Novartis has emerged at the forefront of the next
generation of MS treatments, and is therefore ideally positioned
to market Sativex as a symptomatic treatment alongside their
disease modifying treatment," GW's managing director Justin
Gover said in an interview on Monday.
The fact that Novartis was one of the world's leading
oncology companies was an added attraction, he said.
GW's partner in the United States, Otsuka Pharmaceutical, is
developing Sativex for the treatment of cancer pain.
GW will also receive royalties on sales of the drug, which
is derived from cannabis grown at a secret locations in the
Sativex, which is sprayed under the tongue, is made of two
active ingredients from the cannabis plant.
Sativex is sold as a prescription drug in Britain by Bayer
(BAYGn.DE) at a cost of around 11 pounds ($18) per day, while
Almirall (ALM.MC) is the marketing partner elsewhere in Europe.
(Editing by Ben Hirschler; Editing by Jon Loades-Carter)