In a deal just shy of $150 million, Micromet AG partnered with Serono SA its Phase II monoclonal antibody, MT201, designed to treat prostate and metastatic breast cancer.

While Munich, Germany-based Micromet will complete Phase II trials in those indications, Serono immediately is taking over all development costs, and it gains worldwide rights to develop the product further, as well as commercialize it.

"It is a substantial and very significant agreement for Micromet," said Evelyn Wolf, a spokeswoman for the company. "If you're looking at the profile and features of this compound, this agreement really allows us to develop this compound to the full potential."

MT201 (adecatumumab) is directed against the epithelial cell-adhesion molecule EpCAM. Final results of the two multicenter Phase II trials are expected in the middle of 2006, at which time Serono and Micromet will finalize Phase III plans.

Under their agreement, Micromet receives an initial license fee of $10 million, and would get additional milestone payments of up to $138 million if MT201 is developed and approved worldwide in three or more indications.

"This compound has a potential in all major carcinomas," Wolf told BioWorld Today. A third indication for MT201, beyond prostate and breast cancers, could be cancers of the lung, colon, stomach, bladder, pancreas, head and neck, and ovaries.

At the time Micromet and Geneva-based Serono move the product from a Phase II program into a Phase III program, Micromet has the option to co-develop and co-promote MT201 in the U.S., Europe, or both. If the option is exercised, the companies would share profits. If not, Micromet would receive royalties. Wolf would not give further details of the profit split or the royalties.

And she said it is premature to estimate potential peak sales for MT201, but the breast cancer market is expected to reach $7 billion worldwide in 2006, and the prostate cancer market for the U.S., Europe and Japan could reach $7.3 billion in 2011. MT201 might offer a safety advantage over existing therapies, according to Phase I data.

"One feature you need is a very low immunogenicity and high safety of the drug because you need to reach relatively high serum levels," Wolf said.

MT201 was designed to selectively eliminate tumor cells, leaving healthy tissues unharmed. Clinical testing so far has shown no MT201-neutralizing antibodies. Micromet began the European Phase II trial of MT201 in metastatic breast cancer last March. The trial is enrolling 100 patients. Micromet recently received the go-ahead from the FDA to begin Phase II studies of the product in the U.S.

The fact that MT201 targets EpCAM broadens its prospects in treating several different types of cancers, Wolf said.

"EpCAM is not only present, but it's actually overexpressed in the majority of those carcinomas," she said.

Micromet gained a nonexclusive license to MT201 in September 2003 from Cambridge Antibody Technology Group plc, of Cambridge, UK, which developed the compound with its phage display technology. Micromet received a worldwide license to all of CAT's antibody phage display technology patents to develop antibody-based products targeting the EpCAM antigen. CAT received an up-front license fee and is entitled to milestone and royalty payments on products developed by Micromet and its partners.

With the latest agreement, Micromet's MT201 will be added to Serono's cancer portfolio, which includes TACI-Ig, a product in two clinical trials for B-cell malignancies.

"Serono is very committed to further developing our presence in oncology, both via our in-house research and via partnerships," said Andrew Galazka, Serono's senior vice president of scientific affairs.

Galazka added that the partnership with Micromet "demonstrates both the evolution of our portfolio of novel anticancer agents, as well as our commitment to addressing unmet medical needs."

Privately held Micromet was founded in the mid-1990s as a spinout from Munich University. The company currently has 96 employees and two products in clinical development. Its second product is MT103, a molecule based on Micromet's BiTE (Bispecific T-cell Engagers) technology. It is in Phase I development for non-Hodgkin's lymphoma, and is partnered with Gaithersburg, Md.-based MedImmune Inc.

At the preclinical stage, Micromet is studying another BiTE molecule, MT-110, for solid tumors, as well as an anti-inflammatory drug that targets GM-CSF.

Serono's stock (NYSE:SRA) dropped 7 cents on Tuesday, to close at $15.98.