The deal represents the second major collaboration for Genelabs based on its hepatitis C virus (HCV) drug delivery platform. Under the terms of the agreement, Genelabs is eligible to receive approximately $20 million over a planned two-year research program, including initial upfront payments of $12.5 million.
If all potential clinical, regulatory and sales milestones are met, additional payments to Genelabs could exceed $175 million. Genelabs is also entitled to a royalty on net sales of products covered by the collaboration.
Under the agreement, Genelabs will be responsible for drug discovery research and Novartis is responsible for development and commercialization. Novartis has an option to extend the research funding for a third year and has a right of first negotiation for Genelabs’ HCV NS5a drug discovery compounds.
“The Genelabs non-nucleosides covered by this collaboration have the potential to be complementary with other HCV drugs being developed by Novartis, and I believe Novartis is well positioned to move this project forward efficiently,” noted James Smith, Genelabs president and CEO.