Adherex Technologies Inc. acquired all rights to the cancer agent eniluracil, which was the subject of a July 2005 option agreement with GlaxoSmithKline plc.

GSK previously chose not to exercise its option on a second product, ADH-1, which also was part of that deal in 2005.

Under the original deal, GSK had options to reacquire eniluracil at various points of development. Adherex, of Research Triangle Park, N.C., is paying $1 million to purchase GSK's remaining options.

GSK made a $3 million equity investment in Adherex as part of the original deal. Under that agreement, however, had GSK exercised its buy-back rights, Adherex would have been entitled to up to $120 million in milestone payments, as well as double-digit royalties on any resulting sales. Now, GSK is entitled to undisclosed milestone and royalty payments from eniluracil.

The product, an oral dihydropyrimidine dehydrogenase inhibitor, is designed to improve the therapeutic value of 5-fluorouracil, a commonly used cancer drug. GSK had ended development following failures in Phase III trials. But Adherex, applying its own technology to the combination, believed the failure stemmed from faulty dosing and scheduling. It began a program to prove that adding eniluracil to 5-FU would produce better results than 5-FU alone.

Adherex said it has enough cash to last only into March, so its development plan is unclear. It reported cash and equivalents of only $9 million as of Sept. 30. Adherex now has the right to partner or sublicense eniluracil. Company officials did not return phone calls seeking comment.

Rick Koenig, a spokesman for GSK, told BioWorld Today his company's decision to let go of the product was strategic, not related to any data generated by Adherex.

"We have a very large and expanding oncology portfolio," Koenig said. "There's only so much any company can do. So this would not be a strategic priority for us. We have quite a number of compounds in the oncology pipeline, including some in late-stage development. These will need to be the focus of our efforts and expenditures."

Adherex said in a news release its hypothesis as to why the GSK trials failed is being supported in early clinical trials. "We expect to complete our Phase I dose-escalation trial in North America shortly and intend to begin our Phase II trial in breast cancer promptly thereafter," William Peters, chairman and CEO of Adherex, said in the release. "We also have a Phase I/II trial in hepatocellular cancer ongoing in Asia."

The company's lead drug candidate, ADH-1 (Exherin), was the second piece of the July 2005 deal with GSK, and could have meant up to $100 million in up-front and milestone payments to Adherex, plus royalties on sales. Adherex said in October that GSK's one-time option to license that product had expired unexercised. ADH-1, which targets N-cadherin, is a little further along in development than eniluracil.

Adherex's third drug candidate is sodium thiosulfate, or STS, which is being developed to protect against hearing loss that can result from platinum-based chemotherapy agents. It was the subject of a deal in October with the International Childhood Liver Tumour Strategy Group for the running of a worldwide Phase III trial, which was expected to begin early this year. It will test STS with cisplatin vs. cisplatin alone in about 100 children with liver cancer.

Adherex's stock (AMEX:ADX) fell 2 cents Thursday to close at 34 cents.