LONDON – Symphogen A/S has handed Merck KGaA worldwide exclusive rights to its Phase II cancer antibody product, Sym004, in a deal with a potential value of €500 million (US$631.6 million).

Of that, €20 million is payable up front, with €225 million to come in clinical and regulatory milestones, followed by a further €250 million for hitting sales targets. In addition, Merck will fully fund all development and commercialization work on the first-in-class product, which consists of a mixture of two recombinant antibodies targeted against epithelial growth factor receptors on the surface of cancer cells.

The agreement positions Merck to build on its existing Erbitux (cetuximab) anti-EGFR franchise. For Kirsten Dreyer, CEO of Symphogen, that expertise makes the Darmstadt, Germany-based pharma firm the ideal partner. "It's important we give it to the right company, and on a personal and a data level, we could not find a better partner for Sym004," she told BioWorld Today.

Symphogen began its search for a partner for the product at the JP Morgan conference in San Francisco in January, with serious discussions with Merck's biotech arm, Merck Serono, taking place in late spring. Dreyer was not perturbed by the announcement of the closure of the Merck Serono headquarters in Geneva on April 24, or by subsequent restructuring at Merck. "Obviously I was aware what was going on, but the people we've been talking to remained 100 percent involved," she said.

Symphogen opened negotiations to out-license Sym004 on the back of what Dreyer said were "stronger and stronger data" emerging from two ongoing Phase II trials in patients with late-stage colorectal cancer and head and neck cancer who were progressing on treatment with EGFR monoclonal antibody therapy. The positive effects included tumor shrinkage, progression-free survival and an increase in overall survival.

"We realized the potential is pretty broad, and that Sym004 needs to be pursued in a number of indications. There's no way a company of our size can bring it all the way; it takes a pharma company to provide the resources," Dreyer said. As of July, 88 patients have been treated with Sym004 in clinical trials. Exposure data from patients following repeated weekly infusions, do not indicate an antidrug antibody response.

Importantly, the trials also have delivered evidence of Sym004's mode of action, by showing the eradication of EGFR as a biomarker. That confirmed that rather than blocking the receptor, as is the case with monoclonal antibodies, Sym004 completely removes it from the cell surface. "MAbs only block EGFR; when they disassociate, the cells start to regrow. We've seen they we can remove all the receptors," Dreyer said.

Sym004 does that by binding to two nonoverlapping epitopes in such a manner that the receptors aggregate and the cancer cells subsequently internalize and degrade those complexes. What is not clear as yet from the clinical data is if there is de novo synthesis of EGFR, but Dreyer said that in preclinical studies there was no regrowth of the receptor over a prolonged time.

While she expects Merck to seamlessly pick up the existing studies, Dreyer could not comment on what other trials will take place, or on possible combination studies. "I'm pretty sure they will pursue it in a number of settings," she said.

In April, Symphogen announced that the clinical progress made by Sym004 had allowed it to meet a key clinical milestone specified by its investors in a €100 million financing announced in January 2011. That triggered receipt of a second tranche of capital.

In financial terms, the combination of the second tranche of investment capital and the MercK deal means Symphogen is now funded through to 2016, and has the means to increase the value of its portfolio by keeping ownership of products beyond the proof-of-concept stage. "This will allow us to advance a couple of oncology products in the pipeline and to start a couple of new programs," Drejer said.

Antibody mixtures provide the opportunity to select for both diversity and specificity, and thus fine-tune products to initiate the optimal immune response. However, that raises the issue of which antibodies to put into a mixture and how to manufacture them. Symphogen has developed platform technologies for doing that, and Dreyer said that while Sym-004 targets two epitopes, future products will be aimed at multiple targets.