Seven years after forming a joint venture for cancer immunotherapies based on prostate specific membrane antigen, Cytogen Corp. agreed to sell its 50 percent ownership to partner Progenics Pharmaceuticals Inc. in a deal potentially worth more than $65 million.
The companies came together in June 1999 after Princeton, N.J.-based Cytogen acquired privately held Prostagen Inc., of Allendale, N.J., essentially regaining its rights to develop PSMA technology to treat prostate cancer.
The formation of the joint venture - called PSMA Development Co. LLC (PDC) - called for Progenics to fund the early preclinical work, and for the companies to jointly fund subsequent preclinical and clinical development of any products. Cytogen was to have exclusive North American marketing rights and the option to market outside of the U.S. (See BioWorld Today, June 17, 1999.)
But Progenics wanted to leverage its "manufacturing, regulatory and clinical expertise," said Richard Krawiec, the company's vice president of corporate affairs. "We wanted to go it alone, so we were able to buy out their interest."
Progenics will take full ownership in PDC and pay Cytogen an up-front cash payment of $13.2 million, as well as potential milestone payments of up to $52 million based on regulatory approval and commercialization of the joint venture's products.
Cytogen also would be entitled to an undisclosed royalty on future PDC product sales.
"The $13 million was approximately equal to the monies that Cytogen had contributed to the joint venture over the past seven years," Krawiec told BioWorld Today.
In addition to retaining a financial interest, Cytogen is eliminating an investment obligation in early stage products, freeing it to focus on development of its CYT-500 radiolabeled antibody program, which is "the therapeutic companion to a product that we already sell right now," said Michael Becker, president and CEO of Cytogen.
The company's marketed products include Quadramet, a radiopharmaceutical for pain associated with bone cancer; and Prostascint, a prostate cancer imaging agent.
Considering the company already has approved products and "60 of the 80 employees we have are in our commercial operation," Becker said, "it became clear that that is more the direction that we're focused on," instead of the joint venture's early stage development.
Cytogen said its share of the loss associated with PDC was about $3.2 million in 2005.
While Tarrytown, N.Y.-based Progenics will take on all of the loss going forward, the company gains technologies that originated at Memorial Sloan-Kettering Cancer Center, which first discovered PSMA, and those developed by PDC, including the PSMA antibody drug conjugate (PSMA ADC) and two vaccine products.
Progenics intends to start Phase I studies in 2007 with PSMA ADC, a fully human monoclonal antibody that specifically targets PSMA and is chemically linked to the cell-killing synthetic drug auristatin. It is designed to release the payload once inside the targeted cancer cells, thereby sparing normal cells the toxicities associated with traditional chemotherapy.
In the lab, scientists found that PSMA ADC killed PSMA-expressing prostate cancer cells at picomolar concentrations, but they needed 1,000-fold higher concentrations to kill cells that lack PSMA.
The product also showed activity against human prostate cancer cells, significantly prolonging overall survival, in a recognized animal model.
If it does well in the clinic and reaches the market, the opportunity is large, Krawiec said, considering there are few available therapies for metastatic prostate cancer.
The vaccine products being developed by PDC are designed to prevent the recurrence of prostate cancer after initial surgery or radiation therapy by stimulating the immune system to recognize and destroy the cancerous cells.
Phase I studies of a recombinant-soluble PSMA vaccine have shown that certain patients are able to produce anti-PSMA antibodies. Progenics is optimizing the vaccine before moving it into Phase II, while it plans to bring another product, the viral-vector vaccine, into human testing in 2007.
Cytogen's product, CYT-500, was never part of the joint venture, although it does target PSMA. It incorporates the same monoclonal antibody used in Cytogen's Prostascint (capromab pendetide) molecular imaging agent, but is linked to a therapeutic as opposed to an imaging payload.
Cytogen expects to begin the first U.S. Phase I trial of CYT-500 in patients with hormone-refractory prostate cancer this year. It filed an investigational new drug application with the FDA earlier this month.
As a protein found on the surface of prostate cancer cells and new blood vessels associated with other solid tumors, PSMA is considered a promising target for highly specific cancer therapy. Unlike prostate specific antigen, prostatic acid phosphatase and prostate secretory protein, PSMA is a membrane glycoprotein that is not secreted.
In unrelated news, Cytogen announced Monday a distribution agreement with Savient Pharmaceuticals Inc., of East Brunswick, N.J.
The deal gives Cytogen exclusive U.S. marketing rights for Soltamox (tamoxifen citrate), a cytostatic estrogen receptor antagonist, which is the first oral liquid hormonal therapy approved in the U.S. It is indicated to treat breast cancer in adjuvant and metastatic settings and to reduce the risk of breast cancer in women with ductal carcinoma in situ or with a high risk of breast cancer.
The agreement calls for Cytogen to pay a $2 million up-front licensing fee, as well as sales-based milestone payments totaling $4 million.
Savient and its wholly owned subsidiary, Rosemont Pharmaceuticals Ltd., also will receive royalties, and Cytogen has entered a manufacture and supply agreement for the drug. It plans to launch Soltamox in the third quarter.
Cytogen's stock (NASDAQ:CYTO) gained 8 cents Monday to close at $3.38, while Progenics' stock (NASDAQ:PGNX) fell 92 cents, closing at $23.53.