VNLS Vernalis Plc ADS (MM)

Vernalis Regains Control of North American Rights To Frovatriptan From Elan LONDON, March 30 /PRNewswire-FirstCall/ -- Highlights -- Vernalis reacquires the North American rights to frovatriptan from Elan -- US sales in 2003 were US$37.5 million (Q4: US$13.7 million) -- Vernalis sees significant potential in the prophylaxis of menstrually- associated migraine (second Phase III ongoing) -- Vernalis intends to seek a pharmaceutical partner capable of exploiting the MAM potential -- Elan to provide up to 12 months transitional services in order to maintain product supply -- The Company intends to raise further funds by way of a rights issue in the next 12 months Vernalis plc (NASDAQ:VNLS)(LSE:VER) announces today that it has entered into an agreement to reacquire in their entirety the North American rights for frovatriptan from Elan Pharma International Ltd (Elan) for a total of US$50 million payable over 21 months. Completion of the transaction is subject to the approval of Vernalis' shareholders and, if required, US anti-trust clearance. Vernalis intends to seek a major pharmaceutical partner to realise frovatriptan's significant commercial potential, including the new proposed menstrually-associated migraine indication (see below). Vernalis also intends to seek additional funding by way of a rights issue to assist with the reacquisition of frovatriptan. Under the terms of the agreement, Vernalis will make an initial payment of US$5 million to Elan on completion. This will be followed by payments of US$20 million on 31 December 2004 and US$25 million on 31 December 2005. Vernalis will also purchase certain inventory from Elan at an expected approximate cost of US$5 million payable no later than 31 December 2004. On completion all rights and all product information on frovatriptan currently held by Elan will revert to Vernalis. The licence previously granted by Vernalis to Menarini International in respect of Europe and Central America remains in place. Vernalis Chief Executive Officer Simon Sturge said, "Regaining the rights to frovatriptan in our most important market is an extremely exciting opportunity for Vernalis and represents considerable potential. We look forward to realising the very promising opportunities for frovatriptan as we continue to build value for Vernalis shareholders." Overview of frovatriptan Frovatriptan was launched in the US in the second quarter 2002, where it is marketed as Frova(TM) by Elan Corporation and UCB as an acute treatment for migraine. US sales in 2003 were US$37.5 million and in Q4 2003 amounted to US$13.7 million. Under the current US arrangements Vernalis receives a royalty return of approximately 10 per cent linked to sales. Frovatriptan is currently in Phase III development for the distinct label for prophylaxis of menstrually-associated migraine (MAM) for which no existing triptans are approved. In April 2003 data were presented from an initial clinical study into the efficacy of frovatriptan as a preventive treatment for MAM which affects around 50 per cent of all women who suffer migraine. The data demonstrated a highly statistically significant improvement in the number of patients who were headache-free during the peri-menstrual period for both the studied dose regimens of frovatriptan compared to placebo (p