Dr. Reddy’s Laboratories and XenoPort, Inc., a biopharmaceutical company, have formed a license agreement under which Dr. Reddy's Laboratories will be granted exclusive US rights for the development and commercialization of XenoPort's clinical-stage oral new chemical entity, XP23829. Dr. Reddy's Laboratories plans to develop XP23829 as a potential treatment for moderate-to-severe chronic plaque psoriasis and may potentially develop XP23829 for relapsing forms of multiple sclerosis (MS).

Under the terms of the agreement, Dr. Reddy's Laboratories will receive exclusive US rights to develop and commercialize XP23829 for all indications. In exchange for these rights, XenoPort will receive a $47.5 million up-front payment and an additional $2.5 million for transfer of certain clinical trial materials to Dr. Reddy's Laboratories. XenoPort will also be eligible to receive up to $190 million upon the achievement by Dr. Reddy's Laboratories of certain regulatory milestones, which could be achieved over a period of several years. In addition, XenoPort will be eligible to receive up to $250 million upon the achievement of commercial milestones, and up to mid-teens royalty payments based on potential net sales of XP23829 in the United States.

XP23829 is an investigational drug discovered by XenoPort. It is an oral fumaric acid ester compound that is a prodrug of monomethyl fumarate. Fumaric acid ester compounds have shown immuno-modulatory and neuroprotective effects in cell-based systems and preclinical models of disease. Biogen’s Tecfidera, which is approved for relapsing forms of MS in the United States and relapsing-remitting MS in the European Union and Fumaderm which is approved in Germany for psoriasis, are based on another MMF prodrug known as dimethyl fumarate. XP23829 is protected by a US composition-of-matter patent that currently has an expiration date of 2029.

Source: Dr. Reddy’s Laboratories