Under the deal, Novartis will pay an initial $5m (£3m) to sell Sativex in Australia, New Zealand, Asia, the Middle East and Africa. GW is also potentially in line for $28.75m of milestone payments as well as royalties on sales.
Sativex treats muscle spasms in MS patients and GW is also trialing its use for cancer sufferers. The drug was launched in Britain last year, with the cannabis used in the drug grown at secret locations in the English countryside.
Agreeing a deal with Novartis allows GW to take the drug into emerging markets. Analysts said GW “could not have asked for a better partner in these regions” than the Swiss major.
Justin Gover, GW’s managing director, said: “We are delighted to have entered into this agreement with Novartis. As one of the world’s leading pharmaceutical companies with a strategic focus in both MS and oncology, Novartis represents an excellent commercial partner for Sativex in these important and growing international markets.”
GW has already struck similar licensing agreements to sell Sativex in other parts of the world, including Otsuka Pharmaceutical in the US, and Bayer in the UK.
GW shares rose by 11.95 to 107.45p on Monday.
Shawn Manning, analyst at Singer Capital Markets, said: “Successful commercialisation of Sativex is a key driver for GW Pharma, given our view that this is the key factor that will drive the potential for sustainable profitability going forwards.”
By Graham Ruddick