Pfizer to pay $803 mn to Incyte for drug rights

New York, Nov 21 | Updated: Nov 22 2005, 05:33am hrs
Pfizer Inc is set to pay Incyte Corp as much as $803 million for the development, manufacture and marketing rights of drugs to treat chronic inflammatory conditions, the companies said on Monday.

Shares of Incyte, a drug development company, jumped more than 41% in premarket trade.

Under the collaborative research and license agreement, Pfizer will get exclusive rights to Incytes portfolio of CCR2 antagonist compounds, the most advanced of which is in mid-stage studies in rheumatoid arthritis and insulin-resistant obese patients.

Pfizer gains rights to potential uses for the oral drugs, except for one drug that may treat multiple sclerosis and possibly one other undisclosed indication.

In return, Wilmington, Delaware-based Incyte will receive $40 million up front, payments worth up to $743 million should the experimental drugs reach various stages of development, and royalties on future sales.

The worlds largest drugmaker also agreed to buy $20 million in notes that will be convertible into Incyte stock, and to provide research funding for the CCR2 portfolio. The agreement is subject to antitrust review and other standard closing conditions, the companies said. Shares of Incyte rose $1.97 to $6.77 on the Inet electronic brokerage system.