GPC Biotech signs pact for cancer drug with Pharmion

By Ted A. Knutson

Washington, Dec. 20 - GPC Biotech AG and Pharmion Corp. announced Tuesday a co-development and license agreement for satraplatin, a drug with the potential to treat prostate and other cancers. GPC will receive an upfront payment of $37.1 million from Pharmion.

The $37.1 million includes an $18 million reimbursement for past satraplatin clinical development costs and $19.1 million for funding of ongoing and certain future clinical development to be conducted jointly by Pharmion and GPC Biotech.

The companies will pursue a joint development plan to evaluate development activities for satraplatin in a variety of tumor types and will share global development costs, for which Pharmion has made an additional commitment of $22.2 million. Pharmion will also pay GPC Biotech $30.5 million based on the achievement of certain regulatory filing and approval milestones, and up to an additional $75 million for up to five subsequent European regulatory approvals for additional indications.

GPC Biotech will also receive royalties on sales of satraplatin in Pharmion's territories at rates of 26% to 30% on annual sales up to $500 million, and 34% on annual sales more than $500 million. Finally, Pharmion will pay GPC Biotech sales milestones totaling up to $105 million, based on the achievement of significant annual sales levels in the Pharmion territories.

Satraplatin, an investigational drug, is a member of the platinum family of compounds. Over the past two decades, platinum-based drugs have become a critical part of modern chemotherapy treatments and are used to treat a wide variety of cancers.

Satraplatin has shown promising safety and efficacy as demonstrated by significant improvement in progression-free survival in a randomized study of first-line treatment of patients with hormone-refractory prostate cancer and is the subject of a phase 3 registrational trial as second-line chemotherapy treatment for patients with hormone-refractory prostate cancer.

Data from the pivotal phase 3 trial are expected to form the basis of a Marketing Authorization Application in Europe and a New Drug Application in the United States for this indication. Based on data from this trial, Pharmion expects to file the application in Europe in 2007.

Under the agreement, Pharmion gains exclusive commercialization rights for Europe, Turkey, the Middle East, Australia and New Zealand, while GPC Biotech retains rights to the North American market and all other territories.

GPC Biotech is a Martinsried, Munich, Germany-based biopharmaceutical company working on anti-cancer drugs.

Boulder, Colo.-based Pharmion is a pharmaceutical company with a hematology and oncology focus.

The announcement was made in a 6-K filing with the Securities and Exchange Commission.

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