SykePharma licenses Somnus' sleep drug

UK drug-delivery specialist SkyePharma has entered an accord for the for worldwide development and commercialization Somnus Therapeutics' sleep-inducing drug, SKP-1041. The agent is a new controlled-release formulation of a non-benzodiazepine hypnotic agent which utilizes SkyePharma's Geoclock technology. As part of the agreement, the UK firm will formulate and manufacture the drug which will compete in the global hypnotics market, estimated to be worth $3.0 billion a year.

Under the terms of the deal, SkyePharma could receive up to $35.0 million in milestone payments, of which $4.0 million is payable on signature, up to $11.0 million during the development phase, mainly on product approval, and $20.0 million in sales-related royalties. The first milestone payment will be triggered by the successful completion of a Phase I clinical study of the product. SkyePharma will also receive a royalty on future sales escalating upwards from high-mid single-digit. In addition, Somnus will be responsible for the majority of the development and clinical trial costs.