Acadia Pharmaceuticals Inc. is poised to receive a $20 million equity purchase and up to $75 million in aggregate payments in a collaboration deal with Sepracor Inc.

The partnership includes a three-year research and development term, during which the companies will develop drug candidates using Acadia's discovery platform to treat central nervous system disorders.

"Sepracor is an ideal partner because of its strong expertise in late-stage development and commercialization and marketing capabilities," said Tom Aasen, chief financial officer of San Diego-based Acadia, adding that Sepracor will "nicely complement Acadia's work" in discovery platform development and preclinical studies.

As part of the agreement, Sepracor is purchasing $10 million worth of Acadia common stock at a 40 percent premium to the 30-day average trailing closing price per share. Aasen estimated the shares would sell at $9.28 each, resulting in about 1.1 million shares, giving Sepracor about a 6 percent interest in Acadia.

Shares of Acadia (NASDAQ: ACAD) rose 59 cents Tuesday to close at $7.02.

Marlborough, Mass.-based Sepracor also agreed to make another equity purchase of $10 million at a 25 percent premium on the date of the collaboration's one-year anniversary, Aasen said. Total stock purchases are not to exceed 19.9 percent of Acadia's outstanding shares.

The agreement involves two discovery areas. The first entails using Acadia's muscarinic platform, a range of compounds that include Acadia's m1 agonist program and target neuropsychiatric disorders, to develop a drug for CNS disorders, Aasen said.

Sepracor will provide Acadia with research funding over the three-year period and would pay Acadia milestone and royalty payments on any future product sales worldwide. Successful development of one product using Acadia's muscarinic program would result in Acadia receiving $40 million in aggregate payments. The company would receive another $35 million upon successful completion of a combination product with Lunesta.

"If we pursue both efforts, Acadia could receive up to $75 million, plus applicable royalties," Aasen said. "This will provide funding to allow us to continue accelerating our clinical pipeline."

Muscarinic receptors respond to acetylcholine, a neurotransmitter in the central nervous system. Acadia said the selective m1 agonist program could offer cognition treatment in schizophrenics.

"Preclinical evidence suggests that the m1 agonist could be used to treat neuropathic pain conditions, as well," Acadia CEO Uli Hacksell told BioWorld Today.

The second part of the collaboration provides Acadia the opportunity to select a compound from its 5-HT2A program to combine with Sepracor's insomnia drug, Lunesta brand eszopiclone, which received FDA approval last month and is expected to be available to patients this quarter.

"We have a serotonin program, and this provides an option to select a compound to address other areas of sleep indications," Aasen said.

Aasen added that the collaboration allows Acadia to pursue two developments while retaining all the rights to its other products in preclinical and clinical development.

The company's ACP-103, a 5-HT2A inverse agonist, is in Phase II programs for treatment-induced dysfunction of Parkinson's disease and also as an adjunctive therapy for schizophrenia.

Acadia's ACP-104, the principal metabolite of clozapine, is in development to treat schizophrenia by stimulating m1 muscarinic receptors in brain nerve cells that play a role in cognition. ACP-104 also is in Phase II studies.

Aasen said Acadia has an ongoing collaboration with Allergan Inc., of Irvine, Calif. Last fall, Allergan filed an investigational new drug application for a small-molecule drug candidate to treat neuropathic pain. Under the agreement, Allergan is responsible for clinical development and has worldwide rights to commercialize products, while Acadia is entitled to milestone and royalty payments.

The companies also are developing products in the areas of glaucoma and ophthalmology.

Sepracor's stock (NASDAQ:SEPR) rose 83 cents to close at $60.98.