GSK, Synta Pharmaceuticals Form $1-Billion Drug-Development Pact

London (Oct. 10)-GlaxoSmithKline (GSK) and Synta Pharmaceuticals (Lexington, MA) agreed to jointly develop and commercialize STA-4783. The drug is an injectable, small-molecule, oxidative stress inducer for treating metastatic melanoma that is entering Phase III clinical development. The total value of the pact, conditioned on achieving certain regulatory and development milestones, is $1 billion.

Under the terms of the agreement, Synta will receive an upfront cash payment of $80 million. Synta will also be eligible to receive potential milestone payments of as much as $135 million for the approval of STA-4783 in metastatic melanoma. Synta could earn as much as $450 million for development and regulatory milestones for various indications and as much as $300 million in potential commercial milestone payments. In addition, GSK may, subject to Synta’s agreement, purchase as much as $45 million of Synta’s common stock upon achieving specified development and regulatory milestones.

The companies will share responsibility for developing and commercializing STA-4783 in the United States. GSK will have exclusive responsibility outside the US. Synta will fund all development for metastatic melanoma in the US, and the companies will share responsibility and costs for developing STA-4783 in other indications. Synta and GSK will jointly commercialize STA-4783 in the US. Synta will receive a tiered profit share based on annual net sales. The companies will share development costs outside of the US, and Synta will receive double-digit tiered royalties on net sales.

The agreement is subject to regulatory closing.