West Coast Editor

Corixa Corp.’s stock regained ground Tuesday with news of its gene-licensing deal with Ortho-Clinical Diagnostics, a Johnson & Johnson company, for breast cancer diagnostic tests.

Under the terms, Seattle-based Corixa is giving Ortho-Clinical Diagnostics (OCD), of Raritan, N.J., exclusive worldwide rights to use its breast cancer genes in nucleic acid diagnostics applications in return for license fees, research funding, milestone payments and potential royalties.

“It obviously contributes to our annual revenues, but it’s a diagnostics transaction, not a therapeutics transaction,” said Steven Gillis, chairman and CEO of Corixa. “This [deal] is predominantly for diagnosis of either initial disease or return of disease, post-surgery or post-other therapy.”

No further specifics were given. Corixa’s shares (NASDAQ:CRXA) closed Tuesday at $6.67, up 64 cents, or nearly 11 percent.

The stock fell 36 percent last week when Corixa disclosed that the FDA asked for more evidence of safety and clinical benefit in order to consider the biologics license application for Bexxar (tositumomab, iodine-131), a treatment for non-Hodgkin’s lymphoma, and said more studies are likely. (See BioWorld Today, March 14, 2002.)

Bexxar, which consists of an antibody specific to the CD20 antigen on B cells conjugated to radioactive iodine-131, works by attaching to a protein found only on the surface of B cells, including non-Hodgkin’s lymphoma B cells. Corixa got the product in 2000, when it took over San Francisco-based Coulter Pharmaceuticals Inc. in a stock swap then valued at more than $900 million. (See BioWorld Today, Oct. 17, 2000.)

The Bexxar setback happened as San Diego-based IDEC Pharmaceuticals Corp. is gearing up to launch Zevalin (ibritumomab tiuxetan), its radioimmunotherapy for non-Hodgkin’s lymphoma.

Gillis said the genes licensed to OCD were developed as a result of Corixa’s vaccine work research that has yielded more direct fruits for the company as well. At the start of this month, Corixa was granted FDA approval on the design of a second Phase III trial for its melanoma vaccine, Melacine. (See BioWorld Today, March 1, 2002.)

“Diagnostics for us has always been a way of capturing additional value from the discoveries we make with therapeutic intent,” he told BioWorld Today. “It’s more the tail of the dog than an essential organ of the dog.”

Corixa has a number of deals for diagnostics in infectious disease, he added, but “this is our first on the cancer side, and it’s limited to nucleic acid-based [tests].”