National Editor

XOMA Ltd. entered its third antibody licensing deal of the year, this one an arrangement with Dyax Corp., which is providing not only payments but also access to its antibody library and a license to its important Ladner phage display patents.

"There is some money [involved]," said Jack Morgan, senior vice president of corporate development and business operations for Cambridge, Mass.-based Dyax.

"XOMA gets the rights to our technology to use for its internal discovery and development purposes," he said. "We get the rights for that, but also the rights to use their technology in providing services and libraries to third parties. The grants are therefore asymmetrical, and as a result we're paying a license fee and, in some instances, there can be royalties."

Morgan declined to be more specific about amounts.

"It's an initial license fee, paid in installments," he said. "The license fees involved are within the framework of the expense structure and cash burn we've been forecasting to the outside world," he said. "They're certainly not insignificant, but they are along our operating parameters."

Under the terms, Dyax - which boasts the earliest priority date for phage display patents in the U.S., with four approved, and has more than 60 licensees to the Ladner patents already - gets a license to use XOMA's antibody expression technology to develop products (on its own and with collaborators) and to produce antibodies under XOMA patents.

Dyax also is released from claims under XOMA patents related to past activities that involved the XOMA antibody expression technology, which Dyax may now use with its own methods.

"It's not clear there were past damages," Morgan said, but the agreement is expected to head off potential problems. Further details were not disclosed.

Phage display in antibody work lets researchers quickly identify a range of compounds that bind with high affinity and specificity to targets, which makes the deal a winner for XOMA, and antibody expression and production are obvious keys to working in the space, so Dyax also comes out well, too.

Morgan told BioWorld Today the deal with XOMA is part of an effort to "bring peace and clarity" to the world of intellectual property regarding phage display.

"XOMA and BioSite [Inc., of San Diego], both of whom we've cross-licensed with, had a lawsuit they ended up settling with a cross-license," he said. Another dispute is ongoing between UK-based Cambridge Antibody Technology Group plc and MorphoSys AG, of Munich, Germany (the latter also being the firm with which XOMA has its third cross-license).

Morgan said Dyax has agreements with CAT and MorphoSys, and the deals "continue to be modified and renegotiated."

XOMA's most recent major news involved the humanized monoclonal antibody Raptiva (efalizumab) for psoriasis, partnered with South San Francisco-based Genentech Inc., which yielded positive Phase III data. (See BioWorld Today, Sept. 18, 2002.)

Laura Zobkiw, corporate communications manager for XOMA, noted that the company has been involved in antibody research since the 1980s, and the Dyax arrangement allows for a broadening of that work.

Meanwhile, Raptiva, "one of the more successful antibodies under development right now," is expected to be the subject of a biologics license application filing by the end of the year, she told BioWorld Today.

Dyax, which is among the companies recently reducing staff to marshal its resources, has a pair of recombinant proteins in mid-stage trials. DX-88, which inhibits the blood enzyme kallikrein, is in a Phase II trial for hereditary angioedema and another Phase II for cardiopulmonary bypass. DX-890, which inhibits neutrophil elastase, is in a Phase I/II trial for cystic fibrosis. (See BioWorld Today, Sept. 11, 2002.)

Dyax's stock (NASDAQ:DYAX) closed Wednesday at $1.66, up 44 cents, or 36.1 percent. XOMA's shares (NASDAQ:XOMA) ended the day at $5.75, up 13 cents.