BioWorld International Correspondent

LONDON Xenova Group plc signed a deal worth up to US$63 million plus royalties with Genentech Inc. for rights to Xenova’s preclinical OX40 program in immune inflammatory diseases.

Genentech will pay license fees of up to $5 million during the first year of the collaboration, followed by up to $58 million in milestones on the development and commercialization of one product, and royalties on sales. Milestone payments would begin when the product enters clinical development. Genentech, of South San Francisco, has an option to develop a second product, and if it does so would make further milestone and royalty payments.

Xenova CEO David Oxlade told BioWorld International, “This deal is a license of rights to develop products and does not include products as such. The terms for a preclinical deal are extremely attractive.

“We couldn’t ask for a better partner. Genentech is highly experienced in the development of biologicals for this kind of target.”

Genentech will fund all future development within the scope of the agreement, and will carry out all the development work, regulatory filings and the manufacture and sale of any products worldwide.

OX40 and OX40 Ligand are interacting cell-surface proteins that are important for the induction and regulation of immunity, acting as co-stimulating molecules in the initiation of the immune cascade. In particular, they have the ability to regulate the T-cell/antigen-presenting cell interaction, thereby modulating signals that are central to a range of disease processes.

Xenova, based in Slough, UK, retained the rights to use OX40 in oncology. In addition, the company has an existing relationship with Celltech Group plc, also of Slough, under which Celltech is developing an anti-OX40 antibody for the treatment of immune diseases, and Xenova is retaining those rights.

Genentech and Xenova are setting up a joint research committee to oversee the work. “In immunology Genentech is interested in downregulation of OX40, whilst in cancer we want to up-regulate it. Genentech will do its own discovery and development, but I’m sure the two avenues of research can learn from each other,” Oxlade said.

Xenova has published data on preclinical candidates, but Oxlade said it would be one to two years before the cancer program reaches the clinic.

This is the third big deal Xenova has signed in the past eight months, and the fifth since it acquired the OX40 technology when it merged with Cantab Pharmaceuticals plc in April 2001.

“We have done deals with a total potential value of more than $300 million in the last eight months, and this one in OX40 highlights the value we acquired with Cantab,” Oxlade said.

In December, the company licensed its topoisomerase program for the treatment of solid tumors to Millennium Pharmaceuticals Inc. for $11.5 million up front, R&D funding of $20 million, plus milestones and royalties. Before that, QLT Inc., of Vancouver, British Columbia, took rights to Xenova’s multidrug-resistance modulator in a deal with a headline value of £75 million.

The day before the Xenova deal was announced, Genentech said it was paying up to $50 million for access to Seattle Genetics Inc.’s antibody drug conjugate technology for linking drugs to antibodies. Genentech said it intended to apply the technique in cancer, but it could also be applied in immune disorders. In February, Seattle Genetics signed a deal worth a potential $30 million with Celltech to use the technology for immunological targets.

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