BioWorld International Correspondent
LONDON - Pharminox Ltd. sealed a two-year deal with Schering-Plough Corp. at a headline value of $40 million, validating its technology and providing the springboard for a new £5 million to £10 million (US$19.6 million) financing round.
The deal is to find successor compounds to temozolomide (Temodal/Temodar), which Schering markets worldwide for malignant glioma. It was discovered and developed by Pharminox's chief scientific officer, Malcolm Stevens, when he was director of the research charity Cancer Research UK's (CRUK) Experimental Cancer Chemotherapy Group at Nottingham University.
The expectation is that the follow-on compounds will have a broader spectrum of effect, Pharminox's CEO, Peter Worrall, told BioWorld International. "Temozolomide has certain limitations in that it is only applicable to tumors that are deficient in particular aspects of their DNA machinery. Malcolm has believed for some time that he could come up with a similar product with wider applicability."
Full terms of the agreement were not disclosed, but it will involve Schering paying Pharminox's R&D expenses over two years of the contract. The Nottingham, UK-based company will carry out medicinal chemistry studies, generating hundreds of compounds for further screening by Schering. Milestones are payable if any are taken forward, and royalties would be in addition to the $40 million headline price tag.
Worrall said he hopes the deal "will help persuade investors" as the company seeks funds.
Pharminox was spun out of Oxford University's Chemistry Department in 2001 with backing from the quoted technology management company IP Group plc. The platinum compounds around which it was formed did not progress because of toxicity issues, but the company began to build its relationship with Stevens, in-licensing rights to several of his compounds from Cancer Research Technology Ltd., the technology commercialization arm of CRUK.
Stevens subsequently joined Pharminox in 2004, and in September this year, when his current grant from CRUK ran out, his group transferred to become employees of Pharminox, moving out of the University of Nottingham to the Biocity incubator where Pharminox is based.
Worrall, who was chief financial officer of Vernalis plc when it was taken over by British Biotech plc (with the merged company taking the Vernalis name), said money from a new funding round will be used to progress in-house projects to the clinic by the end of 2008. The lead product is a telomere targeting agent that Worrall said is the most advanced compound in the class.