Central nervous system therapies company Neuronex is being acquired by Acorda Therapeutics (NASDAQ:ACOR) in a deal valued at up to $133 million, yielding to Acorda a novel epilepsy treatment nearly ready for filing with the U.S. Food and Drug Administration.

But privately-held Neuronex gets just $2 million up front. Critical to the Morrisville company getting more is the achievement of development and sales milestones on Neuronex’s lead compound: a nasal spray version of seizure medication diazepam. The nasal version offers an easier form of administration for a drug developed as a rescue treatment for epilepsy patients suffering seizures.

Diazepam was first marketed as Valium, though there are now generic versions of the oral drug. Valeant Pharmaceuticals (NYSE:VRX) developed an alternative version called Diastat AcuDial, which is administered as a rectal gel.

Hawthorne, N.Y.-based Acorda said in regulatory filings that Neuronex’s nasal diazepam, referred to as DZNS, fits into the company’s neurology drug portfolio. Acorda’s top selling drug is multiple sclerosis treatment Amphyra, which generated $210.5 million in 2011 revenue. The deal puts the DZNS in the hands of a company with a neurology sales force ready to commercialize the drug. But first the compound must clear some development and regulatory hurdles.

Because Neuronex is reformulating an existing product rather than developing a completely new drug, the company plans a 505(b)(2) new drug application with the FDA, a pathway that only requires the applicant to show that the reformulated product is bioequivalent to the original drug, which has already been approved by the FDA as safe and effective. Neuronex will base its filing on the safety and efficacy data of the Valeant drug.

Neuronex licensed DZNS from South Korean drug company SK BioPharmaceuticals. That license gave Neuronex worldwide rights to the compound except for some Asian countries. Under Neuronex’s agreement with SK, Neuronex must pay SK up to $8 million upon reaching development milestones, plus another $3 million in sales milestones. SK is also due royalties on sales. If Acorda completes its acquisition of Neuronex, Acorda assumes responsibility for all financial obligations to SK.

The agreement calls for Acorda to cover the estimated $1.2 million in R&D work leading up to the pre-NDA meeting and the company has kicked in $500,000 of that amount so far. After that meeting, Acorda can complete the Neuronex acquisition by paying Neuronex another $6.8 million. Both sides retain rights to terminate the deal. If that happens, Neuronex can keep any money paid prior to the closing as a break-up fee. But if Acorda does close the deal, it takes over all responsibility for developing, financing and commercializing the diazepam nasal spray. Neuronex would then stand to collect up to $18 million in development milestones. The big money will come after the drug is commercialized. Neuronex could gain $105 million in sales milestones, plus royalties from sales.

Neuronex was founded in 2010 by the former management team of Addrenex Pharmaceuticals, led by Chief Executive Moise Khayrallah. Durham-based Addrenex, built without raising any venture capital investment, was acquired by a Shionogi Pharma subsidiary for $29 million in 2009.

Neuronex raised $1.5 million in a series A round that came from angel investors who originally invested in Addrenex. Neuronex also received financial support from the North Carolina Biotechnology Center in the form of a $250,000 loan.