LONDON -- Boehringer Ingelheim has terminated its US$39 million licensing deal with Scotia Holdings plc for the development and marketing of its lead product, the photodynamic cancer therapy agent Foscan. Scotia put Foscan at the center of its strategy in May this year, when it cut its portfolio from more than 20 projects to six and announced plans to spend 40 percent of its £23 million research and development budget on Foscan. The share price fell by a quarter to £0.89 when the news was announced on Nov. 26.
Robert Dow, CEO of Scotia, told BioWorld International the company would "grin and bear it and get on with things. We are sitting in a relatively strong position because, under the license, Boehringer gave us the money and we did the trials. So, it is not a shambles. We were responsible for doing everything needed for the first filing.
"Nobody in their right mind would say they were not bothered by the loss of a development partner," he added. "But we got $21 million, and we were doing all the work, so the project is intact. We will have in 1999 a very valuable product to license."
Dow said he has received assurances from Boehringer that the termination of the Foscan license was not a reflection on the product. "They have also dropped several internal projects and some other external ones," he said.
As a result of the termination, no further money will be paid by Boehringer, but Scotia, which is based in Stirling, Scotland, will not have to repay any money. There is no impact on the Japanese license agreement with Kyowa Hakko, announced at the same time as the Boehringer deal in September 1997.
However, Scotia said it will delay first regulatory filings for the treatment of primary head and neck cancers in Europe, and for recurrent oral and pharyngeal cancers in Europe and the U.S., from the end of the second quarter of 1999 to the end of September. "This delay is because we were expecting help from Boehringer to put the file together," Dow explained. "We will now need to use an external consultancy. This will cost £500,000."
In addition, Scotia intends to take over the assessment of whether to test Foscan in the follow-up indication of prostate cancer. "The plan is to spend £1 million to £2 million over the next two years in dose ranging and early Phase I," Dow said. The company raised £50 million earlier this year, and sold Efamol, its nutritional products division, for £16 million in November. The company has £52 million in the bank, sufficient for two years.
Dow said he believes that the prospects of finding a new partner for Foscan are very good. "It would be good to find a partner anytime between now and the first filing, but this is not a fire sale," he said. "Scotia is not desperate and we are not about to give this product away."
Dow was appointed CEO of Scotia on Jan. 1, taking over from the company's founder, David Horrobin. "We have come through a very tough year, where we have reorganized every area and got the whole business onto a solid scientific, organizational and budgetary footing," Dow said. "I am looking forward to 1999, because things have got to get better." *