BioWorld International Correspondent

MUNICH, Germany - Zentaris AG signed a license agreement with Access Oncology Inc. to develop perifosine for the treatment of cancer in a deal potentially worth more than $30 million.

Access Oncology, of New York, will make up-front and milestone payments of potentially more than $18 million, pay royalties on net sales of perifosine, and fund all further development of the compound for the U.S., Canadian and Mexican markets, including completion of Phase II and Phase III trials. Access Oncology will have exclusive rights to market the compound in those countries. The companies said that the value of the package could exceed $30 million.

Perifosine belongs to a class of lipid-related compounds that disrupt the lipid-mediated signal transduction pathways necessary for tumor growth and survival. Zentaris, of Frankfurt, said the compound augments the antitumor effects of radiotherapy and several commonly used chemotherapeutic agents. Phase I trials have been successfully conducted in Europe and the United States, where the trials were sponsored by the National Cancer Institute.

"The National Cancer Institute will be sponsoring nine Phase II studies of perifosine," Karsten Tiemann, the chief financial officer of Zentaris, told BioWorld International. "They don't do that for just any compound, and that is a good indication of its potential."

The Phase II program with the NCI will explore use in melanoma, sarcoma and breast, prostate and pancreatic cancers.

Tiemann added that Zentaris retains the rights to market the compound outside of the Americas. "We believe that eventual profits from the regions not covered by the license will be substantial," he said. Zentaris also will not bear the costs of developing the drug, a definite plus for the bottom line, he said.

The deal with Access Oncology was closed after Zentaris examined several potential suitors. "In all of our processes we have arranged for a lot of competition," Tiemann said. "This puts us in a position to choose.

"In exploring a potential partnership, we talk with three to five parties, and we set key criteria. The most important is how a partner plans to proceed with further development. Payment is an issue, but more important is how people work together at a practical level. Do their strategic thinking and business philosophy match ours?"

Juergen Engel, the CEO of Zentaris, said, "Access Oncology stood alone as the one company that had both oncology-focused development and marketing capabilities, and a shared business philosophy with Zentaris." Tiemann told BioWorld International that the expected time to market for perifosine was 2007-08. "Like many other biotech deals, this one is more backloaded than frontloaded," Tiemann said, while declining to give more specific details.

Drawing attention to a license signed in July 2002 with Ardana Bioscience, of Edinburgh, Scotland, which is expected to yield up to €28 million, Tiemann added, "We are fully financed and are making deals for the future."

Access Oncology is a privately held company that focuses on acquiring, developing and marketing novel therapeutic compounds for cancer. It licenses clinical-stage compounds. Zentaris is a member of the Degussa Group, a diversified chemical company, from which it was spun off in the first quarter of 2001. An IPO scheduled for that year was postponed indefinitely in June 2001. Zentaris integrates basic research and clinical development in endocrinology and oncology. It employs more than 70 people at its facilities in Frankfurt.