Bristol-Myers Squibb Co. will make a $10 million equity investmentin Somatix Therapy Corp. by the end of the month to fulfillobligations made last year regarding development of the GVAXtherapeutic vaccine.
The acceptance by the FDA of Somatix's Phase III protocol for thetherapy triggered the $10 million milestone, the second $10 millioninvestment since the deal was signed in August 1995. For the $20million Bristol-Myers Squibb gained a right of first offer tocollaborate on oncology programs developed at Somatix.
Under the deal Somatix must notify Bristol-Myers of its intention topartner an oncology program, and the pharmaceutical company has90 days from then to come to terms on a collaboration. Somatixnotified Bristol-Myers of its intention to partner the program, butisn't disclosing exactly when it started the 90-day process, said MarkBagnall, vice president and chief financial officer of Alameda, Calif.-based Somatix.
GVAX is being tested in Phase I/II trials in melanoma and has earlystudies in prostate cancer and renal cell carcinoma. The dealoriginally called for the second $10 million payment when a Phase IIprotocol was approved by the FDA. Somatix instead is going intoPhase III because the early trials provided enough information tomove ahead, Bagnall said.
There still are FDA questions to answer before the trial starts,Bagnall said, and Somatix would like to get a corporate partner inplace before the study. He said the protocol calls for a trial with 350Stage III melanoma patients with a primary endpoint of two-yeardisease-free survival.
But that protocol could be reworked in light of new FDA regulationsthat may change the requirements needed before the agency wouldapprove a cancer drug, Bagnall said.
"The protocol we submitted and got cleared did not anticipate theFDA's action," Bagnall said. "We currently are evaluating whetherwe should change the protocol to take advantage of the new rules thatwill be formalized with respect to surrogate endpoints."
The GVAX technology involves removal of a tumor and geneticallymodifying the cells to contain the gene for granulocyte macrophage-colony stimulating factor. The modified cells then are irradiatedbefore being injected into a patient to stimulate an immune responseagainst cancer cells.
Bristol-Myers, of New York, will purchase Somatix shares at a 12percent premium to the average trading price of the stock over fivedays, ending two days before the closing (expected April 30),Bagnall said. The first $10 million investment was made at $8.32 ashare, a 32 percent premium at the time. (See BioWorld Today, Aug.16, 1995, p. 1.)
From a GVAX partner, Bagnall said, Somatix would like to find acompany that would support the majority of the costs of the program,as well as helping in directing the trials and marketing products.
The $20 million investment giving Bristol-Myers five-year rights offirst offer into Somatix oncology programs marked thepharmaceutical company's first alliance in gene therapy. At the timethe company said it was a first step in a strategy that would take itfurther into the area.
In a statement, Leon Rosenberg, president of Bristol-Myers SquibbPharmaceutical Research Institute, said, "We view this additionalinvestment as an opportunity to increase our participation in theexciting area of gene therapy and its potential application to cancertherapy. We look forward with great anticipation to Somatix's genetherapy cancer program realizing its scientific promise." n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.