Theravance, a biopharmaceutical company based in San Franciso, and Alfa Wassermann, a pharmaceutical company based on West Caldwell, N.J., have entered into an exclusive development and commercialization agreement in certain countries for velusetrag, Theravance's investigational 5-HT4 agonist in development for gastrointestinal motility disorders.

The companies will collaborate in the execution of a two-part phase II program to test the efficacy, safety and tolerability of velusetrag in the treatment of patients with gastroparesis. If the results of the studies are sufficiently favorable, Alfa Wassermann will have the right to exercise an exclusive option for the development and commercialization of velusetrag in the E.U., Russia, China, Mexico and certain other countries. Theravance retains full rights to velusetrag in the U.S., Canada, Japan and certain other countries.

Financial terms of the transaction include funding of the phase II program by Alfa Wassermann, a $10 million option fee payable to Theravance by Alfa Wassermann if it exercises its option following completion of the phase II program, and potential development, regulatory and sales milestone payments of up to $53.5 million. Theravance is entitled to receive royalties on net sales by Alfa Wassermann ranging from the low teens to 20%.

"Gastroparesis represents one of the most significant unmet medical needs in gastroenterology and we look forward to moving quickly with Alfa Wassermann to bring this potential medicine to patients who have limited alternatives today," said Rick E Winningham, chairman and CEO of Theravance.