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Xenova Group PLC (XEN)

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Tuesday 14 August, 2001

Xenova Group PLC

Re Agreement

Xenova Group PLC
14 August 2001

                                                         FOR IMMEDIATE RELEASE



                             Xenova Group plc



    US$105m (£75m) North American collaboration with QLT Inc for multi-drug
                         resistance modulator XR9576





Slough, UK, 14th August 2001 - Xenova Group plc (Nasdaq NM: XNVA; London Stock
Exchange: XEN) today announces that it has signed an exclusive licence
agreement with Vancouver-based QLT Inc (Nasdaq NM: QLTI; TSE: QLT) for the
development and for the marketing in the United States, Canada and Mexico of
Xenova's multi-drug resistance (MDR) modulator, XR9576, for the treatment of
MDR in cancer.



In selecting the most suitable development and commercialisation partner for
XR9576 and in line with its goal of maximising the product's potential in the
market, Xenova's objective was to find a partner that has a commitment with
respect to oncology, possesses strong clinical development expertise, the
financial resources to fully support the programme and, most importantly, does
not have a vested interest in a particular chemotherapeutic agent which might
present it with a conflict in terms of maximally exploiting XR9576's
potential.



QLT is a world leader in photodynamic therapy (PDT) using light-activated
drugs to treat eye disease and various cancers. Based in Vancouver, Canada,
and founded in 1981, QLT discovered and developed Photofrin(R), the world's
first PDT drug used in cancer, and Visudyne(TM), a PDT drug for the treatment of
wet, age related macular degeneration which is partnered with Novartis AG and
approved in almost 50 countries around the world.  QLT has stated its
objective is to build an integrated biopharmaceutical company and will use
this opportunity to establish an oncology franchise.



Under the terms of the agreement, QLT will assume responsibility for the
further development of XR9576, including Phase III trials, all regulatory
filings and the manufacture and sale of XR9576 within those territories
covered by the agreement.  QLT will make an immediate upfront licence payment
of US$10m (£7.1m) to Xenova and will provide up to $45m (£32.0m) in funding
for all development activities related to Phase III clinical studies for
XR9576 in North America and Europe.  Milestones of up to US$50m (£35.6m) and
royalties in the range of 15 to 22 per cent depending on the level of North
American sales are also receivable by Xenova.



Xenova retains all rights to XR9576 outside the United States, Canada and
Mexico, including European and Rest of World marketing rights.



Xenova has obtained US FDA agreement to proceed with Phase III development for
XR9576.  QLT will adopt and refine the clinical plan and the Phase III
programme is expected to begin in the first half of 2002 once the clinical
study protocol is finalised. It is anticipated that QLT will file for
marketing approval of XR9576 in first line treatment in combination with
chemotherapy in advanced non-small cell lung cancer (NSCLC) in 2005.



NSCLC is the first of several indications in which XR9576 will be
investigated. Other potential cancer indications include breast, ovarian,
acute myeloid leukaemia, sarcoma and colorectal.



David Oxlade, Chief Executive of Xenova, commented:



'This deal with QLT allows us to proceed as planned with pivotal studies in
Europe and the US, and gives us a strong development partner with a commitment
to establishing a dedicated oncology marketing and infrastructure in the US.



'Importantly, this deal retains for Xenova all rights to XR9576 in Europe and
the Rest of the World and, as we move towards obtaining marketing approvals,
we shall be establishing further commercial partnerships to maximise the value
of this important new therapeutic approach.'



Julia Levy, President and CEO of QLT, said:



'This collaboration underlines QLT's commitment to oncology and to expand
beyond photodynamic therapy and supports our longer term plan to become a
fully integrated biopharmaceutical company with a North American sales force.



'Our internal evaluation of this product confirms that XR9576 is the leading
MDR inhibitor in development based on its potency, selectivity and stage of
development. We have proven our drug development capabilities with the
commercialisation of Visudyne(TM) and Photofrin(R) and look forward to applying
our expertise to the development of XR9576 in an area with such a high unmet
clinical need.'



                                    -ends-



                                   Contacts


Xenova Group plc                                      Financial Dynamics

David Oxlade, Chief Executive Officer                 David Yates/Fiona Noblet
Daniel Abrams, Finance Director                       Tel: +44(0) 207 831 3113
Hilary Reid Evans, Head of Corporate Communications
Tel: +44 (0) 1753 706600



QLT Inc

Elayne Wandler or Tamara Hicks
Tel: (001) 604 872 7881 Fax: (001) 604 873 0816



A presentation for analysts will be held at 9am at the offices of Nomura
International plc, Nomura House, 1 St. Martin's le Grand, London EC1A 4NP.
Please contact Mo Noonan on 0207 269 7116 for further details.



Notes to Editors



Xenova Group plc's product pipeline focuses principally on the therapeutic
areas of cancer, infectious, autoimmune and cardiovascular diseases.  The
Group has a well-established track record in the identification, development
and partnering of innovative products and technologies.  The Group has
partnerships with a number of major pharmaceutical companies including Glaxo
SmithKline, Lilly, Pfizer and Celltech.



XR9576

One of the major barriers to successful cancer chemotherapy is the development
by cancer cells of resistance to those drugs being used for treatment.  XR9576
targets this drug resistance mechanism through the inhibition of
P-glycoprotein, a membrane based 'pump' that acts to expel the cytotoxic drug
from the tumour cell, preventing the cytotoxic drug from being fully
effective.  XR9576 has completed a series of three separate Phase IIa trials,
in which XR9576 was administered together with three of the world's
best-selling cytotoxic drugs, each of which is known to be affected by the
resistance mechanism.  The successful outcome of these trials was announced in
late 2000/early 2001.  The trials demonstrated that the combination of XR9576
with the cytotoxic drug was safe and well tolerated and the no clinically
significant pharmacokinetic interaction occurred between XR9576 and the
cytotoxic drug.  This allows the cytotoxic drug to be administered at or close
to its full normal clinical dose, which is of potentially significant
therapeutic benefit.  A number of complete and partial responses (elimination
or shrinkage of the tumour) were observed to occur during these open label and
uncontrolled studies.



For further information about Xenova and its products please visit the Xenova
website at www.xenova.co.uk



QLT Inc is a world leader in photodynamic therapy, a field of medicine
utilising light-activated drugs in the treatment of disease.  QLT's innovative
science has led to the development and commercialisation of breakthrough
treatments utilising this technology for applications in ophthalmology and
oncology and is exploring the potential in other diseases.  For more
information you are invited to visit QLT's website at www.qltinc.com.



Visudyne(TM) is a trademark of Novartis AG

PHOTOFRIN(R) is a registered trademark of Axcan Pharma





Safe Harbor Statement under the US Private Securities Litigation Reform Act of
1995: Some or all of the statements in this document that relate to future
plans, expectations, events, performances and the like are forward-looking
statements, as defined in the US Private Securities Litigation Reform Act of
1995.  Actual results of events could differ materially from those described
in the forward-looking statements due to a variety of factors, including those
set forth in the Company's filings with the US Securities and Exchange
Commission.