By Mary Welch

SuperGen Inc., needing extra time to negotiate a deal with AVI BioPharma Inc. for AVI's cancer vaccine Avicine, paid $5 million for exclusive negotiating rights in the U.S. until the end of February.

SuperGen acquired 7.5 percent of AVI's outstanding common stock in exchange for a $2.5 million payment and 100,000 shares of SuperGen common stock.

"SuperGen paid $5 million to have exclusive rights for a period of time to negotiate a deal with us," said Denis Burger, AVI's president and CEO. "We have a letter of intent. They were totally busy negotiating a $150 million deal with Abbott and they didn't want Avicine to slip away. So we did this deal so that in the meantime we wouldn't go elsewhere. You could say we're engaged."

Does Burger anticipate a mega-deal being announced soon between SuperGen and AVI?

"I definitely expect something to be finalized by Feb. 28, and I like the word 'mega'," he said with a laugh.

SuperGen, of San Ramon, Calif., just completed a worldwide sales and marketing agreement for its cancer drug, rubitecan, with Abbott Laboratories, of Abbott Park, Ill., in a deal worth up to $150 million, including an up-front equity investment of between $25 million and $40 million. (See BioWorld Today, Dec. 23, 1999, p. 1.)

Burger said the potential deal with SuperGen would be beneficial for several reasons.

"First off, the SuperGen team is the team that built the oncology unit at Bristol-Myers Squibb. Secondly, it is arguably one of the very best in the business in getting drugs through clinical development. Also, this means a lot to them so I think the timetable will be faster than with some of the other companies."

Another key point is that SuperGen, in the letter of intent, signaled it was willing to share revenues rather than royalties, Burger said. "I think that is the best deal we could make for our shareholders."

On SuperGen's part, it wanted some diversity to its oncology portfolio. "I've always said that you have to have many boxes, that chemotherapy won't be enough," said Joseph Rubinfeld, SuperGen's chairman and CEO. "This puts a vaccine into one of our boxes. Avicine is a late-stage product so we're ahead in the game."

Rubinfeld agreed the company has been busy with deals. "We've had a very active year and I'd say we're the leading biotechnology company this year in percentage up. It might be premature to say a deal with AVI is imminent. I've got 7.5 percent now and I'd expect we'll expand that to about 19.9 percent. Let's just see how it goes."

While the companies were negotiating over Avicine, Portland, Ore.-based AVI met with the FDA to finalize the Phase III protocol. The trial will involve 500 patients who will receive chemotherapy with a placebo vaccine or with Avicine. Patients will have metastatic colorectal cancer but must be naove to chemotherapy. The trial will last two years with the endpoints being progression-free survival and survival. (See BioWorld Today, Dec. 22, 1999, p. 2.)

Avicine has completed five clinical trials with about 180 patients. Results from a Phase II trial in colorectal cancer in combination with chemotherapy showed there were survival benefits in patients who showed immune responses to vaccination by the third month of therapy. In the Phase II trials, Avicine was used as a second-line therapy but will become a first-line treatment option in the Phase III trials.

The synthetic peptide conjugate vaccine is also in Phase II trials in pancreatic and prostate cancer.

Formerly known as CTP-7, Avicine is designed to fight cancer by turning the immune system against cells that carry a hormone common to many tumor types: the human chorionic gonadotropin (hCG) hormone. HCG is a cancer-associated oncofetal protein, which boosts growth and shields cells from immune system attacks.

Essentially a nontoxic therapeutic cancer vaccine, Avicine elicits a highly specific immune response to the hCG by blocking the hormonal potentation of tumor growth, angiogenesis, invasion and immunosuppression.

SuperGen's stock (NASDAQ:SUPG) closed Thursday at $28.50, down 87.5 cents. AVI BioPharma's stock (NASDAQ:AVII) closed Thursday at $5.875, up 34.3 cents.