SGX to collaborate with Novartis to develop treatment for chronic myelogenous leukemia

By E. Janene Geiss

Philadelphia, March 28 - SGX Pharmaceuticals, Inc. announced late Monday that it has entered into a license and collaboration agreement with Novartis to develop and commercialize BCR-ABL inhibitors to treat drug resistant chronic myelogenous leukemia (CML).

Under the agreement, SGX said it will receive from Novartis $25 million in upfront payments and the purchase of SGX common stock, according to a company news release.

Along with success-based milestones, but excluding royalties, total payments to SGX could exceed $515 million, including a minimum of two years of research funding, officials said.

The success of Gleevec (imatinib), the first targeted therapy in Philadelphia Positive (Ph+CML) proven to inhibit BCR-ABL, has fundamentally changed the treatment of Ph+CML, officials said. But, a subset of patients have developed resistance to Gleevec or cannot tolerate therapy, officials said.

For these patients, there are no other approved treatment options. Drug candidates from SGX's lead series, developed from its FAST proprietary drug discovery platform, have exhibited activity against wild-type and drug resistant BCR-ABL mutants, including the most challenging T315I mutant, officials said.

SGX said it will be responsible for completing preclinical development of the lead candidate and submitting an Investigational New Drug application with the Food and Drug Administration.

SGX said it also will be responsible for the completion of an initial phase 1 clinical study, after which time Novartis will be responsible for conducting further clinical development and commercialization of the compound.

In addition to the upfront and milestone payments, SGX said it will receive royalty payments upon successful commercialization of products developed under the collaboration.

SGX said it retains an option to co-commercialize, in the United States, oncology products developed under the agreement.

If exercised, the option would enable SGX to reinforce the commercial presence in the North American hematology markets that the company plans to establish with the potential launch of Troxatyl in the second half of 2007, assuming the successful completion of the ongoing phase 2/3 clinical trial for the treatment of third-line acute myelogenous leukemia and regulatory approval of Troxatyl for this initial indication in 2007, officials said.

Novartis is a Basel, Switzerland, pharmaceutical and health care company.

SGX is a San Diego biotechnology company focused on development and commercialization of innovative cancer therapeutics.

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