Xenova Group plc has sealed two deals with a headline value of #90 million, agreeing to a #75 million collaboration with QLT Inc. for its lead oncology product and a #15 million license with Genencor International Inc. for its Phogen drug delivery technology.

The agreement with QLT will see the Vancouver-based company making an up-front payment of US$10 million and taking over responsibility for developing XR9576 for the prevention of drug resistance in cancer chemotherapy. QLT will pay up to $45 million in funding for Phase III trials in North America and Europe, and make milestone payments of up to $50 million. It will be responsible for all regulatory filings and the manufacture and sale of the drug in North America. Royalties on sales will range from 15 percent to 22 percent, depending on volume.

Xenova, based in Slough, UK, retains marketing rights in Europe and the rest of the world and said it intends to seek further partners in these markets.

The deal with Genencor, of Palo Alto, Calif., covers the application of Phogen¿s VP22 gene delivery technology to the development of DNA vaccines for infectious viral diseases. Phogen will receive #1.2 million in the first year in license, option and contract research payments, and with milestone payments the deal has a potential value of #15 million, plus undisclosed royalties on any products.

Genencor will initially evaluate VP22 technology for vaccines to treat hepatitis C, hepatitis B and human papillomavirus.

David Oxlade, Xenova¿s CEO, said the XR9576 deal ¿allows us to proceed as planned with pivotal studies in Europe and the U.S. and gives us a strong development partner with a commitment to establishing a dedicated oncology marketing and sales infrastructure in the U.S.¿

He added, ¿The Phogen relationship with Genencor represents an important step in realizing the potential of Phogen¿s drug delivery enhancing technology.¿

Xenova took over Cantab Pharmaceuticals plc in April, and it also released details of the portfolio review and progress in integrating the two companies. Staff numbers have been cut by 45, and Oxlade said there would be annual cost savings of #9 million going forward. Shares in Xenova rose 8.5 pence to 48 pence when the deals were announced on Tuesday.

The deal with Xenova will take QLT, a specialist in photodynamic therapy, in a new direction. The company has expressed its ambition to become an integrated biopharmaceutical company with its own sales force and Julia Levy, president and CEO, said, ¿This collaboration underlines QLT¿s commitment to oncology and to expand beyond photodynamic therapy.¿

Oxlade said QLT would be a good partner because it is committed to the oncology market, has clinical development expertise and enough money to support the program. ¿Most importantly, [QLT] does not have a vested interest in a particular chemotherapeutic agent, which might present it with a conflict in terms of maximally exploiting XR9576¿s potential.¿

XR9576, a P-glycoprotein pump inhibitor, has successfully completed three separate Phase IIa trials in which it was administered with three cytotoxic drugs. Each of these is affected by the resistance mechanism whereby the P-glycoprotein membrane-based pump expels the cytotoxin from the tumor cell.

Xenova has FDA agreement to proceed with Phase III. QLT will adopt and refine the plan, and the program is expected to begin in the first half of 2002. First filing is expected in 2005.