By Kim Coghill

Washington Editor

Millennium Pharmaceuticals Inc. has taken another step in building its oncology franchise by entering a license agreement to develop and commercialize three of Xenova Group plc¿s potential cancer drugs.

The multimillion-dollar deal aims to develop three compounds that have a mechanism of action including dual inhibition of topoisomerases I and II for the treatment of solid tumors. The compounds are called XR11576, XR5944 and XR11612.

The companies did not go into great detail about which types of cancer the drugs will target, but Anna Protopapas, vice president of business development for Cambridge, Mass.-based Millennium, said the compounds have shown efficacy in a number of preclinical models. ¿Particularly exciting efficacy has been in lung and colon cancer, but we believe the compounds could have broad implications across multiple solid tumors, and that¿s what we¿ll be pursuing,¿ she told BioWorld Today.

Xenova, of Slough, UK, will take the products through Phase II trials, at which time the companies would negotiate terms for Phase III trials. Both companies indicated that Millennium likely would run Phase III trials in North America while Xenova runs them in the rest of the world.

Xenova¿s oral agent, known as XR11576, is the most advanced product, already in Phase I studies. Meanwhile, the others, XR5944 and XR11612, are in preclinical development.

¿We will accelerate development on 5944 as quickly as possible in order to be able to put it into the clinic to compare it to 11576,¿ David Oxlade, CEO of Xenova, told BioWorld Today. ¿These are completely different compounds. We see 11612 as a potential backup, particularly to 11576, since it is orally available.¿

XR5944 is an intravenous formulation.

Financial terms of the deal call for Millennium to acquire development and exclusive marketing rights to the products in North America in exchange for an up-front payment of $11.5 million, plus future milestones and royalties. Xenova keeps commercial rights for all products resulting from the deal outside the U.S., Canada and Mexico. Upon the end of Phase II trials, Millennium assumes subsequent development activities in North America and Xenova retains development responsibility in the rest of the world.

The agreement also gives Millennium the right to market in North America any improvements or additional products based on the same topoisomerase inhibitor technology, in which case Xenova will receive further milestones and royalties.

Oxlade said Millennium will pay Xenova about $20 million in research and development funding over the next two to three years. ¿The milestones are certainly substantial as far as Xenova is concerned,¿ he said. ¿The royalties are commensurate with a Phase I/II product, so they are royalties that are significantly better than they would be with a preclinical collaboration.¿

Oxlade said Xenova¿s intention is to begin Phase II immediately following the close of Phase I, which is likely to occur in the next 18 months.

Xenova has had a lot of experience with topoisomerases, Oxlade added. ¿This is not our first time in the field. We had an earlier compound called XR5000 that was tested in ovarian and other cancers, and though it showed some activity, it didn¿t have enough potency to make it a commercially attractive product,¿ he said.

Topoisomerases, enzymes that are involved in the replication of DNA during cell division, play a role in proliferation of cancer cells. Inhibitors of both topoisomerase I and topoisomerase II are expected to have potentially significant therapeutic advantage over agents targeting one type of topoisomerase alone, according to Millennium.

The deal with Xenova complements Millennium¿s growing pipeline that includes LDP-341, a protease inhibitor in Phase II trials for multiple myeloma and chronic lymphocytic leukemia. It also is in Phase I trials for solid tumors (colon, breast, pancreatic and prostate).

Millennium¿s cancer pipeline also includes an anti-PSMA antibody in Phase I trials for advanced prostate cancer; and guanylyl cyclase C (GC-C), a protein expressed on the cell surface of colorectal tumors, and its related ST ligand, that it licensed in last month from Targeted Diagnostics and Therapeutics Inc.

Recently, Millennium said it will merge with South San Francisco-based COR Therapeutics Inc. in a stock exchange worth $2 billion. The merger gives Millennium COR¿s marketed product, Integrilin, and COR¿s experienced sales force. Also, in late October, Millennium sold its 33 percent share of Campath to ILEX Oncology Inc., of San Antonio. (See BioWorld Today, Dec. 7, 2001.)

For Xenova, the Millennium deal comes on the heals of a $105 million-plus agreement with Vancouver-based QLT Inc. to develop XR9576, Xenova¿s product that fights multidrug resistance to chemotherapy agents. (See BioWorld Today, Aug. 15, 2001.)

¿This company is clearly capable of generating innovative science that major companies are prepared to pay very good money for,¿ Oxlade said. ¿Both of the deals I have referred to [Millennium and QLT] have come as a result of research done in-house. These are not compounds that we¿ve acquired or licensed in. This has come out of our own basic in-house research.¿

Xenova also is developing an anti-smoking vaccine to help wean people off nicotine, and an anti-cocaine product being developed with the National Institute on Drug Abuse of the National Institutes of Health.

Millennium¿s stock (NASDAQ:MLNM) closed Monday at $26.93, up $1.71, Xenova¿s stock (NASDAQ:XNVA) closed at $5.35, up 23 cents.