Merck May Pay $700M for Schizophrenia Drug

Merck today finalized a deal worth as much as $700 million to license a schizophrenia drug from Swiss biotech firm Addex Pharmaceuticals. Addex will get $22 million up front, and qualify for another $680 million in milestone payments. Such licensing deals are growing commonplace, Reuters reports, as big pharma turns to little biotech to refill drug pipelines.

Addex, one of a number of newly public Swiss biotech firms, saw its stock rise 6.5% on the news; analysts expect more deals from it before 2008 is over. Addex has signed two deals with Merck alone—the other is a $170.5 million pact to develop a Parkinson's drug—but will still burn $22.2-26.6 million in 2008. (More Merck stories.)