Xenon and Novartis Enter into Drug Development Deal

On September 20, 2004, Xenon Pharmaceuticals Inc. entered into an agreement with Novartis Pharma AG to research, develop and commercialize compounds from Xenon’s Stearoyl-CoA Desaturase-1 (SCD1) drug development program. SCD1 is a key regulatory enzyme in fatty acid metabolism and a novel target for the treatment of obesity and metabolic syndrome.

Pre-commercial payments to Xenon under this transaction total up to US$157 million. In addition, Xenon will receive royalties on products developed from this collaboration and holds an option to co-promote products in certain territories. Under a separate agreement, Novartis also made an equity investment in Xenon that closed on November 8, 2004.

This was reported as the largest pre-clinical biotech collaboration ever entered into by a Canadian company.

Xenon was represented by Karen Corraini, general counsel of Xenon in Vancouver, and assisted by John Pearson, Beth Macdonald, Peter Martin and Chris Falk (tax) on the collaboration transaction, and by Rich Balfour, Mike Urbani and Orysia Semotiuk on the equity transaction, all of McCarthy Tétrault LLP.

Novartis was represented by Kimberly Urdahl and Tom Chakraborti of Novartis Legal Services in Basel, and assisted by David McIntyre of Osler, Hoskin & Harcourt LLP on the equity transaction.