Staff Writer

Pharmacyclics Inc. has entered a potential $39.5 million deal with a private French pharmaceutical firm Les Laboratoires Servier that, in the words of Pharmacyclics CEO Robert Duggan, could shine the light on its pipeline products that inhibit the enzyme histone deacetylase, or HDAC.

The alliance will focus on Pharmacyclics' Pan HDAC inhibitor, PCI-24781, which is in Phase I/II trials in the U.S. It is being developed to treat solid tumors and hematological malignancies, cancers that affect the blood, bone marrow and lymph nodes.

Sunnyvale, Calif.-based Pharmacyclics would maintain all U.S. rights to the Pan HDAC inhibitor under the deal. Servier acquired the exclusive right to develop and commercialize the Pan HDAC inhibitor product worldwide except for the U.S., and will pay a royalty to Pharmacyclics on non-U.S. sales.

Finding an outside partner for its HDAC product candidate had been a key goal for the company this year. Duggan, who also serves as chairman of the board, has about $38 million invested in his company but a significant investor was needed to bring in additional funds.

Servier will pay Pharmacyclics up-front payments totaling $11 million on signing the contract and an additional guaranteed $4 million for a research collaboration over a 24-month period, paid in equal increments every six months with the initial payment due Oct. 1.

The French drug firm, which does business in 140 countries, also will pay for all development costs outside the U.S. In addition, Pharmacyclics will receive $24.5 million based on the achievement of certain milestones up to and including commercialization.

Duggan told BioWorld Today that he believes Servier would put the HDAC product "on a very fast track" and "move it into the limelight." He said the deal gave the Pharmacyclics portfolio a great deal of validation. "We're a small biotech company in terms of balance sheet, but we're huge, robust in terms of science and novel products."

The company has at least 14 confidentiality agreements with major pharmaceutical companies that are "looking at our portfolio," said Duggan, who hopes to partner other products in the future.

The company has a Burton's tyrosine kinase (PCI-32765) in a Phase I dose-escalation study in patients with non-Hodgkin's lymphoma. It is one of the company's five product candidates, four of which are in the clinic. Data from preclinical studies of the tyrosine kinase product will be reported at the American Association of Cancer Research meeting in Denver.

As for its HDCA inhibitor data, Duggan said that compared to other products in that drug class in Phase I, "we're right at the top. . . . I don't think anyone did better." He indicated that the product showed stabile disease and tumor shrinkage. "We're very encouraged about the prospects of our HDAC inhibitor. We will do our best to get into Phase II as soon as possible," Duggan said.

Zolinza (vorinostat), by Merck & Co. Inc. is the first oral HDAC inhibitor to be U.S. approved. But a number of other HDAC inhibitors currently are in clinical trials, including Novartis AG's LAQ-824 LBH-589, the natural product depsipeptide (FK-228) from Gloucester Pharmaceuticals and the benzamide SYND 275, according to Pharmacyclics.

Low blood platelet count (thrombocytopenia) has been observed in clinical trials of HDAC inhibitors, and several of Pharmacyclics' competitors have reported cardiovascular toxicities with their product candidates. But Pharmacyclics said it has not seen any significant side effect (other than reversible thrombocytopenia) with PCI-24781.

The company also is exploring non-oncology indications for its HDAC inhibitors, such as rheumatoid arthritis and juvenile arthritis. HDAC inhibitors have shown activity in RA and other inflammatory models, as well as clinical activity in various cancers, according to information posted on the Pharmacyclics website.

The company plans to discuss its third-quarter earnings as well as the alliance with Servier in a conference call April 24.

Shares in Pharmacyclics (NASDAQ:PCYC) were down 3 cents Friday, closing at $1.22.