Washington Editor

Xenova Group plc is losing a partner for its DNA-targeting oncology program.

The Slough, UK-based company said Millennium Pharmaceuticals Inc. would no longer fund the program after the end of ongoing Phase I studies of XR11576 and XR5944, a decision made following an internal portfolio prioritization review. Millennium has been Xenova's North American partner for the program for three years.

"We hadn't anticipated this," Veronica Cefis Sellar, Xenova's head of corporate communications, told BioWorld Today. "Millennium did an internal review of its programs and a prioritization of its portfolio, and that's when the decision was made."

The news dropped Xenova's stock. Its ADRs (NASDAQ:XNVA) lost 9.8 percent of their value Tuesday, falling 13 cents to close at $1.20. Millennium's shares (NASDAQ:MLNM) lost 24 cents to close at $12.86.

Nevertheless, patient dosing continues and the Phase I trials will be completed as planned. Results are expected in the first half of next year, and since Millennium is fully funding research on the DNA-targeting agents until the end of Phase I, the change will have no immediate cash effect on Xenova.

The companies soon will begin discussions about the return of North American commercial rights, which were the subject of a license agreement signed late in 2001. That deal provided Xenova an up-front payment of $11.5 million, and since then the company has been reimbursed by Millennium for research costs. Terms of the deal also called for Xenova to receive milestones and royalties, and it retained rights elsewhere in the world. (See BioWorld Today, Dec. 18, 2001.)

Sellar declined to comment as to whether Xenova would receive a breakup payment from Cambridge, Mass.-based Millennium. Looking for another partner for North America "is definitely one of the possibilities," she added. "We're going to wait until we see results of the Phase I studies, and then we'll be in a better position to make an assessment as to the future strategy of the program itself."

She added that it remained too early to speculate whether Xenova could advance the program with its own resources.

When the companies first began their partnership, one of the products, XR11576, already had entered Phase I. An oral compound, it is considered the most advanced product. XR5944, an intravenously delivered product, was in preclinical development at the time of the licensing deal. A third product, XR11612, remains in preclinical studies and is designed as a backup to XR11576.

All are in development for solid tumors.

Xenova stressed that all other programs within its portfolio will continue to move forward as planned.

Some are partnered, such as its lead product, TransMID, for high-grade glioma; it is in Phase III trials and has commercialization partners in Europe, Japan, Israel and India. Phase II studies of a therapeutic vaccine for cocaine addiction are being funded by the National Institute on Drug Abuse.

On its own, Xenova has a therapeutic vaccine for nicotine addiction in Phase I, as well as a pancreatic cancer product called XR303.