By Brady Huggett
Genzyme Molecular Oncology, saying that knowledge can equal money, out-licensed its colon cancer diagnostic patent rights to three companies, bringing the total companies paying for that intellectual property to seven.
Quest Diagnostics Inc., of Teterboro, N.J.; Mayo Medical Laboratories, of Rochester, Minn.; and SRL Inc., of Tokyo, were granted nonexclusive colon cancer diagnostic rights to the APC and/or MSH2 genes for use in diagnostic testing services that detect increased risk for certain colon cancers. Specifically, Quest Diagnostics and SRL have licensed diagnostic rights to both genes, while Mayo Medical licensed rights only to the APC gene.
"Both genes are very important genes in colon cancer and predisposition to colon cancer," said Gail Maderis, president of Genzyme Molecular Oncology. "This can help in determining levels of risk and using that information to segment patients for increased follow-up screening."
Genzyme Molecular received an up-front license fee in each agreement and will receive royalties on each diagnostic test performed. With the three new agreements, it continues its trend of licensing out assets not core to its focus. Although Maderis could not disclose exact figures, citing confidentiality agreements with the licensees, she explained Genzyme Molecular's thinking on the agreements.
"We see [diagnostic testing] as growing significantly over time," Maderis told BioWorld Today. "So we are getting modest funds today, but setting up a broad base of royalty streams and potential for the future. Diagnostics are a very critical part of cancer care and management."
Genzyme Molecular Oncology, a division of Genzyme Corp., of Framingham, Mass., focuses on cancer therapeutics, and therefore has little need for diagnostic property.
"It has always been part of our strategy to out-license our intellectual property, and specifically cancer gene diagnostics," said Elizabeth Heller, public relations associate at Genzyme. "It helps to generate funds for our cancer programs. And this is just one example of our [intellectual property] portfolio."
Genzyme has five cancer vaccines in the clinic, focused on melanoma, breast and kidney cancer, and should initiate two additional fusion cancer vaccine trials sometime this year, Heller said. Including a cancer antigen that should make its way to the clinic as well in 2001, the company should reach 2002 with eight cancer products in clinical trials.
"We could be in pivotal trials in 2002 with a cell fusion cancer vaccine," Heller told BioWorld Today. "That is a priority at this point."
In October, Genzyme Molecular signed a discovery and licensing agreement with Purdue Pharma LP that has a potential $330 million price tag. Purdue Pharma will select up to 20 cancer antigens identified by Genzyme Molecular during a three-year research program. Both companies may commercialize products using the antigens and any antigens that Purdue does not select will remain the property of Genzyme. (See BioWorld Today, Oct. 19, 2000.)
The cancer therapeutics area is the butter on Genzyme's bread, but out-licensing should remain a factor financially in the future, Heller said.
"Part of our business strategy is to get the most value out of our intellectual property and this is one way to do it," she said.
Genzyme Molecular Oncology's stock (NASDAQ:GZMO) rose 59.37 cents Thursday, or about 7 percent, to close at $8.875. n