(RTTNews) - Valeant Pharmaceuticals (VRX) rallied in pre-market trading, after the company entered into a worldwide collaboration agreement for retigabine with GlaxoSmithKline (GSK).

The stock was up $1.15 just after 9:25 am ET, rising to $21.25. If pre-market gains hold, the stock will open at its highest level since May 2005.

Valeant Pharmaceuticals and GlaxoSmithKline enter into an exclusive worldwide collaboration agreement for the investigational drug retigabine. Valeant noted that retigabine is a first in class neuronal potassium channel opener for treatment of adult epilepsy patients with refractory partial onset seizures.

Valeant and GSK announced plan to file a New Drug Application in the US and a Marketing Authorization Application in Europe for retigabine by early 2009.

As per terms of the deal, Valeant will development and commercialization rights to retigabine, VRX698 and the other back-up compounds from the potassium channel opener discovery program in exchange for an upfront payment of $125 million to Valeant.

In addition, GSK may also pay $545 million based on the achievement of certain milestones and development of additional indications for retigabine, and an additional $150 million with respect to milestones of VRX698 and the back-up compounds and double-digit royalties on worldwide sales.

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