If successful, the move would represent a market breakthrough as there is currently no transdermal version of any anti-psychotic drugs, according to the firms.

Under the terms of the deal, drug delivery company Dermatrends will be providing the drug delivery technology for transdermal delivery of an anti-psychotic drug selected by Teikoku Pharma USA.

"In terms of clinical compliance, it is better than the oral version," Lee Schafer, a Dermatrends spokersperson, told In-Pharmatechnologist.com

"You can put the patch on the back of a patient for example where it is difficult to reach and it is easier to monitor that the patient is actually taking the medication."

Details about the patch have not been disclosed but Schafer said it would probably be a once daily administration.

While there are no assurance that the two firms will enter into a joint development or licencing deal as a result, Dermatrends CEO Ted Schwarzrock said he is optimistic about prospects for positive results from the development of this prototype.

"We have produced positive efficacy results for many of our products, including similar compounds to the one we are testing for Teikoku," said Schwarzrock.

"Our mission is to help demonstrate that Dermatrends' patented hydroxide releasing agent (HRA) technology can be combined with the chosen active pharmaceutical ingredient (API) to produce a proprietary pharmaceutical product for our new partner."

He added that his company believed that transdermal delivery could be a preferred method of delivery for many patients and represents an important new market opportunity.

Recent research shows that more and more drug makers are turning to reformulation to prolong the lifecycle of their drugs and supplement dwindling pipelines, and central nervous system (CNS) is one of the most frequently targeted area for reformulation.

Anti-psychotic drugs are part of the category of medicines that treat diseases affecting the CNS - the second largest therapeutic category of drugs.

According to Datamonitor, the trend within the CNS market includes predominantly the reformulation of anti-psychotics.

Retail sales in the US of anti-psychotics were more than $10bn for the 12 months ended in October 2006, according to data from IMS Health.

For many firms like Teikoku, reformulating an existing drug is a daunting task, as they may not have sufficient in-house resources or expertise to rise to the challenge.

Schafer said that his company expected to take a decision at the end of 2007 when the proof of feasibility is completed and that he hoped Dermatrends and Teikoku could continue working together.