BioWorld International Correspondent

PARIS - Flamel Technologies SA terminated its license agreement with Biovail Corp. for its long-acting acyclovir formulation, Genvir.

The agreement was signed in February 2003 and granted Toronto-based Biovail a license for the U.S. and Canada, subject to its initiating certain clinical trials in the U.S. for the treatment of episodic and recurrent genital herpes infections.

Biovail said at the time that it intended to manufacture Flamel's version of what already was a well-known herpes treatment. (It was first brought onto the market in 1985 as Zovirax.) Genvir incorporates Flamel's Micropump delivery system, a polymer-based, controlled-release, taste-masking system for the oral administration of small-molecule drugs.

Micropump is one of two polymer-based drug delivery systems that Flamel Technologies, of Lyon, France, has developed for the administration of improved formulations of known compounds. The other is Medusa, a nano-particulate system designed to deliver therapeutic proteins and peptides.

Described as a "multimillion-dollar agreement," the deal with Biovail called for it to develop, register, promote, market and manufacture Flamel's oral, solid, controlled-released form of acyclovir. It provided for Biovail to make an up-front payment to Flamel, to be followed by milestone payments and royalties on sales. Biovail was responsible for all clinical development and regulatory filing costs, as well as for the costs associated with the marketing, advertising, sale and distribution of the product in North America. Biovail said it expected to initiate Phase III trials of Genvir in the second half of 2003, intending to conduct two trials in separate genital herpes indications.

Flamel had the right to terminate the agreement if Biovail failed to initiate clinical trials by a specific date.

President and CEO of Flamel, Gérard Soula, said Biovail had been allowed a lot more time than the agreement stipulated and Flamel regrets that so much time has passed without anything happening. Flamel's priority now is to "work actively to find another partner to conduct these trials and to handle the registration and marketing of Genvir," Soula said.

Flamel also is looking for a partner for the European market, the company's marketing manager, Frédérick Simonin, told BioWorld International.

Biovail is specialized in three therapeutic fields - cardiovascular diseases, central nervous system disorders and pain management.

Biovail might have more pressing problems on its plate. On March 4 it issued the following statement: "The [SEC] has issued a formal order of investigation related to the previously disclosed informal inquiry initiated in November 2003, which sought historical financial and related information, including, but not limited to, the company's accounting and financial disclosure practices for all of 2002 and up to November 2003.

"The formal investigation continues to be primarily accounting practices, however, the scope of the investigation is broader, and the period under review now goes back to June 2001."

The statement also said that the SEC advised Biovail that the investigation does not mean "any violation of law has occurred, nor should it be considered a reflection upon any person, entity or security."

The company said it did not plan to comment further on the matter, unless lawfully required to do so.