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Flexion acquiring global rights to Xenon's pain management drug

Flexion Therapeutics Inc. agreed to acquire global rights to develop and commercialize Xenon Pharmaceuticals Inc.'s experimental postoperative pain management drug XEN402 for an up-front payment of $3 million.

Under the agreement, Xenon is eligible to receive up to $9 million through the initiation of a phase 2 proof-of-concept study. Additionally, Xenon will receive up to $40.8 million in clinical development and regulatory milestone payments and up to $75 million in commercialization milestone payments.

Burnaby, British Columbia-based Xenon is also entitled to receive future sales royalties ranging from mid-single to low double-digit percentages. Moreover, Flexion will assume Xenon's obligation to pay a low single-digit percentage of sales royalty to Teva Pharmaceutical Industries Ltd.

Burlington, Mass.-based Flexion, which develops and commercializes anti-inflammatory and pain management therapies, will use XEN402 to develop an extended-release formulation called FX301.

FX301 is temperature sensitive and transforms from a liquid to a gel, which allows local delivery of XEN402 near target nerves for up to a week while allowing patients to retain motor function. Flexion expects to start clinical trials for FX301 in 2021.