Novartis Pharma has snapped up the exclusive US and Canadian rights for Fanapt (iloperidone), a new approved medication for the treatment of adults with schizophrenia set for launch in early 2010.

The $200m agreement with Vanda Pharmaceuticals will see Novartis adopt exclusive commercialisation rights to the oral formulation of this medicine as well as exclusive rights to develop and commercialise a long-acting injectable in the US and Canada.

Fanapt has been approved by the US Food and Drug Administration as an exciting new atypical antipsychotic for the severe psychiatric disorder, which is estimated to affect more than 2 million adults in the US.

Novartis Pharmaceuticals Corporation CEO and head of pharma North America Ludwig Hantson said that schizophrenia remains one of the most chronic and debilitating of the major psychiatric illnesses.

“With the launch of Fanapt in early 2010, we will build on our heritage in offering innovative treatments for devastating psychiatric diseases,” Hantson said.

Under the agreement, Novartis will make an upfront payment to Vanda of $200m. Vanda will also be eligible for additional payments based on defined development, commercial milestones and sales royalties.

Vanda will retain the rights to develop and commercialise Fanapt outside the US and Canada, but Novartis has the option to enter into discussions with Vanda to co-commercialise Fanapt or receive sales royalties for these markets.

Vanda completed Phase III clinical trials in 2006 and was awarded US approval for Fanapt in May 2009.