BioWorld Today Correspondent

Shares in Clavis Pharma ASA soared on the Oslo Bors Tuesday, on news that it licensed its Phase II pancreatic cancer drug CP-4126 to Clovis Oncology Inc., for an up-front payment of $15 million, plus a potential $365 million in development, regulatory and sales-related milestones.

Clovis, of Boulder, Colo., is taking on responsibility for further clinical development of the compound, a lipid ester version of the nucleoside analogue gemcitabine, and it has gained commercialization rights in North and South America and in Europe.

It is the first deal the company has entered since its formation by the team that sold Pharmion Corp. to Celgene Corp., of Summit, N.J., for $2.9 billion.

Oslo, Norway-based Clavis would receive double-digit royalties on sales. However, it has retained an option to co-promote the product in Europe, in which case it would receive half of the profits, in lieu of European royalties.

The deal is strongly backloaded, with $280 million of the total milestones available attached to sales.

Of the $85 million available in development and regulatory milestones, $49 million is based on the start of Phase III trials and regulatory filings and approvals in the U.S. and Europe.

The remaining $36 million is based on additional indications and formulations. A Phase I study of an oral version of CP-4126 is ongoing.

The deal was structured to maximize Clavis' upside in the success of the program. "The more front-loaded a deal is, the tougher it is to get the royalty rate you'd like to see," Clavis CEO Geir Christian Melen told BioWorld Today. "We have a strong belief in this product."

CP-4126, which is a new chemical entity, bypasses a resistance mechanism that affects the efficacy of gemcitabine, marketed as Gemzar by Eli Lilly and Co., of Indianapolis. Its lipid tail enables the compound to diffuse passively across the cell membrane, instead of relying on a transporter protein, called human equilibrative nucleoside transporter-1 (hENT1), which normally is required for transport of gemcitabine into the cell.

Low expression of hENT1, thought to be an issue in up to two-thirds of pancreatic cancer patients, is correlated with a poor response to gemcitabine therapy. Gemcitabine may, indeed, drive the development of resistance to itself by selecting for cancer cells with low hENT1 levels.

CP-4126 has a second shot at establishing superiority, as it also displays a longer retention time within cancer cells than gemcitabine. "The best case for us is we would have better outcomes for all patients," Melen said. "Our best chance of success is in patients with low hENT1 expression."

The deal has had an immediate impact on the development of CP-4126.

An ongoing Phase II head-to-head study vs. gemcitabine, which was evaluating efficacy on the basis of a surrogate marker, has been expanded to a 250-patient study with an overall survival endpoint.

Data should become available in the first half of 2012. "If it's highly successful, Clovis Oncology believes - and we believe - we can file for approval based on this Phase II trial," Melen said.

The two companies also will collaborate on the development of a companion diagnostic to help physicians identify those patients who would benefit most from CP-4126 therapy.

They will conduct prospective and retrospective observational studies to correlate hENT1 expression profiles with treatment outcomes and to understand how the information can be used by physicians. "There might be certain thresholds [of expression] - that is what the studies will elaborate on," Melen said.

Clavis also will have access to the diagnostic for other nucleoside analogues it is modifying in the same way, using its so-called Lipid Vector Technology. Its lead drug candidate elacytarabine, a modified form of Ara-C, will enter a Phase III registration trial in acute myeloid leukemia in the first half of next year.

For Clovis, the deal proved again it has the ways and means of doing things in a large fashion.

The privately-held company was founded with a $145 venture capital start-up package earlier this year by four former Pharmion executives and the VCs who had backed Pharmion.

Their philosophy, CEO Patrick Mahaffy told BioWorld Today at the time, was to partner with discovery-based companies and take responsibility for developing and commercializing treatments for various types of cancer. Mahaffy described Clovis as sort of a "Pharmion 2.0." (See BioWorld Today, May 22, 2009.)

Shares in the Clavis (OSLO:CLAVIS) jumped 58 percent on the Oslo Bors, closing at $51.25.

Published  November 25, 2009