AltaRex Corp. said it changed its strategic direction to focus on the development of new therapies, following its exclusive licensing agreement two months ago with a wholly owned subsidiary of United Therapeutics Corp.

UTC, which signed a license agreement with Toronto-based AltaRex in April, has agreed to take on all development, manufacturing and commercialization costs - as well as staff costs - for OvaRex, the company said. The license deal was signed while AltaRex was facing financial difficulty. (See BioWorld Today, April 23, 2002.)

The change in strategic focus was disclosed at the AltaRex annual general meeting in Toronto on Thursday.

"The biggest change is we no longer have to spend our entire nickel on OvaRex," Robert Newman, vice president of business operations for AltaRex, said from the company's location in Waltham, Mass. At its peak, AltaRex had about 30 employees in Waltham, and today the staff numbers about 13.

Instead, the remaining staff will focus on securing patents, developing additional therapies and business development efforts, the company said. OvaRex, its drug candidate for ovarian cancer, has been the company's "singular focus" until now, he said.

UTC, of Silver Spring, Md., plans to begin a Phase III trial of OvaRex in the first quarter of 2003 and will meet with the FDA to develop a trial design in late summer or early fall, Newman said. AltaRex had developed OvaRex through Phase II studies.

"With the deal with United, we can now explore other opportunities with our intellectual property," he said.

AltaRex holds a U.S. patent for OvaRex and has been notified that it is slated to receive a patent in Europe. The company's scientists, Newman said, have learned a great deal "mechanistically" in their study of OvaRex, a murine monoclonal antibody.

"This positions the company really to focus on expanding the intellectual property into these other diseases areas or to focus on targets in other disease areas," Newman said.

Those indications may include other cancers or, possibly, autoimmune or allergy indications, he said.

"That's where the potential for strategic collaborations might be the greatest," he said.

UTC now has a portfolio of five antibodies, including OvaRex, from AltaRex. Others are BrevaRex, ProstaRex, GivaRex and AR54. UTC holds worldwide rights except for Northern Europe and areas where AltaRex already has entered into licensing agreements for Southern Europe and the Middle East. AltaRex is actively seeking partners for OvaRex in Northern Europe, Newman said.

AltaRex's stock (TSE:AXO) fell C1 cents Friday to close at C49 cents.