British company GW Pharmaceuticals has signed up with Swiss drug company Novartis to sell its cannabis-based multiple sclerosis drug Sativex in several markets.
Under the deal – which is seen as a major breakthrough for GW - Novartis will pay an initial $5 milllion to sell Sativex in Australia, New Zealand, Asia, the Middle East and Africa.
The deal includes ''milestone'' payments for GW of $34 million, conditional on winning regulatory approval and crossing other hurdles; and double-digit royalties.
Sativex, a sprayed drug derived from a special hybrid of the marijuana plant, treats muscle spasms in MS patients; and GW is also running trials on its use for cancer patients.
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 – a prospect which sent the company's shares soaring by 13 per cent on Monday.