By Jim Shrine

Special to BioWorld Today

Schering-Plough Corp. enhanced its position in the area of the p53 tumor suppressor gene on Tuesday by licensing p53 gene therapy patent rights from Genzyme Molecular Oncology.

And Genzyme's oncology division strengthened its balance sheet with the $5 million up-front payment from Schering-Plough in the potential $35 million deal, as it nears the Nov. 16 opening of public trading of its stock.

Schering-Plough, of Madison, N.J., already has rights to issued patents covering the use of p53 for treating cancer. They came from the February 1996 purchase of San Diego-based Canji Corp., which had licensed them from the University of California system.

The company decided, however, to cover all bases in getting a license to pending patents held by Genzyme, which Genzyme got through the June 1997 purchase of Allendale, N.J.-based PharmaGenics Inc. The patent rights originally came from Johns Hopkins University, in Baltimore.

"The patent situation on p53 is very complicated," Robert Consalvo, Schering-Plough's manager of media relations, told BioWorld Today. "This really strengthens our patent position in terms of development and commercialization of p53 products."

Consalvo didn't want to get into specifics, as a matter of company policy and since it is unclear what claims ultimately will be allowed in the Johns Hopkins patents. But Tuesday's deal ensures that Schering-Plough can continue developing p53 products without fear that there later will be some possible overlap or infringement, he said.

The companies said the new worldwide, exclusive licensing deal could be worth $35 million to Genzyme Molecular Oncology in patent fees and development and sales milestones. There also is a royalty element. Specifics were not disclosed.

Genzyme Molecular Oncology, of Framingham, Mass., retains rights in areas outside gene therapy, such as diagnostics other therapeutic approaches.

"We're not planning on developing a p53 gene therapy product," Bo Piela, Genzyme's manager of media relations, told BioWorld Today. "Licensing the rights allows us to maximize this intellectual property and invest the money we're getting from this agreement into research and development at Genzyme Molecular Oncology."

Schering-Plough has its own program in p53 gene therapy and has two collaborations in place using other companies' technology, include Genzyme Molecular Oncology's lipid gene delivery system. The other, with Transgene of Strasbourg, France, uses Transgene's adenoviral gene delivery method.

"We're trying to find a better vector," Consalvo said. "To be effective, you have to deliver a high payload of p53 to the tumor site without too many side effects."

Schering-Plough already is running gene therapy trials using its recombinant adenovirus encoding p53 product, or rAd/p53. Initial human studies tested intraperitoneal administration in ovarian cancer patients and intrahepatic administration in patients with primary or metastatic liver tumors. Consalvo said those routes show promise and Phase II studies are planned.

If Schering-Plough eventually develops a p53 gene therapy product using Genzyme Molecular Oncology's lipid delivery, then Genzyme would stand to gain milestones from each of the two Schering-Plough deals. The initial deal in January involved lipid delivery of six Schering-Plough genes, including p53, that if all fully developed could be worth up to $80 million to Genzyme Molecular Oncology.

Consalvo said p53 is the only one of the six genes now being developed. He wouldn't discuss specifics, but when the deal was made, the companies said Genzyme could receive up to $7 million this year in up-front payments, research funding and research milestones.

First Schering-Plough Deal Is GMO's Largest

That deal with Schering-Plough is the largest of the two dozen collaborations Genzyme Molecular Oncology has with academic and commercial partners. The second-largest now is the Schering-Plough licensing deal reported Tuesday. Many of the deals involve Genzyme's SAGE, or Serial Analysis of Gene Expression, technology.

Genzyme Molecular Oncology expects revenues from those relationships, its existing cash of $8.1 million as of Sept. 30, and its $30 million line of credit from Genzyme General to sustain three years of operation. Its therapeutics focus is on developing cancer vaccines and angiogenesis inhibitors.

Rather than an initial public offering, Genzyme is taking the oncology division public through a dividend to Genzyme General shareholders, representing 8.7 million shares, and through release of Genzyme Molecular Oncology stock held by PharmaGenics shareholders, totaling 3.95 million shares. The stock will trade on the Nasdaq exchange under the ticker symbol GZMO. *