By Matthew Willett

Peregrine Pharmaceuticals Inc. negotiated with Schering AG to take back development of Oncolym, the radiolabeled antibody Peregrine licensed to Berlin-based Schering in March 1999.

Peregrine intends to speed development of the compound, an antibody linked to a radioactive isotope for treatment of non-Hodgkin¿s B-cell lymphoma, through clinical evaluation, then license it to another company for marketing and commercialization, Peregrine President and CEO Edward Legere told investors in a conference call Friday.

¿We think that first we¿d like to get control of the technology and move it faster on our own as we look at the other partnership goals for the technology,¿ Legere said. ¿We want to have a partner before the pivotal study, mainly because we¿re not able to compete, from a marketing standpoint, with the bigger companies in the marketplace.¿

The marketplace for B-cell lymphoma already could include Rituxin, IDEC Pharmaceuticals Corp.¿s nonradiolabeled chimeric antibody against CD20; Zevalin, a mouse monoclonal antibody targeted against the CD20 antigen also under development by IDEC; and Bexxar, for which Corixa Corp., of Seattle, filed a biologics license application in November.

Legere said he will actively seek a partner for Oncolym, shopping the drug at the Biotechnology Industry Organization conference in San Diego later this month. ¿I¿m willing to give up the up-front fees and take a higher royalty,¿ he said. The deal with Schering carried an 11 percent royalty on net sales, and he agreed a royalty in the teens would be palatable. More money later, he said, is what he¿s pursuing.

¿I¿m looking for a backloaded deal with a higher royalty rate,¿ Legere told BioWorld Today.

Legere said Peregrine, formerly Techniclone Corp., of Tustin, Calif., spent ¿a big fat zero¿ to reacquire the rights to Oncolym. In fact, he said, the company comes out of the reacquisition transaction with a net profit after footing 20 percent of Schering¿s research costs.

¿Schering gave us $3 million up front, and we spent $1.7 million of that back into the study, so we¿re up a net of $1.3 million from where we started, and we have full control of the product back,¿ he said. ¿The real message that should be read by shareholders is that we like Oncolym as a project, but it¿s only one of the products in a multitude of programs we have here.¿

And if Legere wants to secure a deal for Oncolym before it moves into a pivotal trial he¿ll have to pursue it doggedly. Oncolym is nearing Phase III, he said, and could be in the final rounds of testing by the end of the year.

Peregrine¿s Cotara, another radiopharmaceutical, was the subject of a May report at the meeting of the American Society of Clinical Oncology. At that meeting Peregrine reported preliminary safety and efficacy results from a Phase II brain cancer trial. The tumor necrosis drug produced an overall median time to progression of 13.9 weeks compared to the historical control of eight weeks.

Peregrine also is pursuing contract antibody manufacturing, and has programs in two other targeting technologies: vasopermeation enhancement agents and vascular targeting agents. The latter program is in development through a joint venture between Peregrine and Oxigene Inc., of Watertown, Mass., called Arcus Therapeutics LLC.

Peregrine¿s stock (NASDAQ:PPHM) dropped 2 cents in trading Friday, closing at $1.79.

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