Xenova Shares Jump On Research Alliance With Eli Lilly
By Erik Portanger
LONDON (Dow Jones)--Shares in U.K. biotech company Xenova Group PLC jumped Wednesday on news the company has signed a licensing and research agreement with Eli Lilly & Co. of the U.S.
The alliance, aimed at developing a new class of antithrombotic drugs suitable for chronic use, will see Xenova receive up to $35 million in licensing fees, research funding and milestone payments.
Around 1540 GMT, shares in Xenova are up 31 pence, or 16%, at 225 pence.
Louis Nisbet, chief executive of Xenova, said in an interview with Dow Jones Newswires that preclinical work has already begun on developing the new class of blood-clot inhibiting drugs.
The current market for antithrombotic products is around $6.60 billion in the U.S. alone, Nisbet said. 'But the products out there at the moment don't tackle the needs of a lot of patients,' he noted.
Analysts said the alliance is significant for Xenova, both in a financial sense and for the respect that comes from having a major partner. But they also cautioned it could be 5 years or more before any products hit the market, if they make it at all.
In the short term, Xenova expects the deal to have 'a significant positive impact' on cashflow during 1998. Further ahead, the company is hoping that products developed through the alliance will deliver substantial royalties.
Under the terms of the agreement, Eli Lilly will get exclusive worldwide rights to Xenova's technology for PAI-1 (plasminogen activator inhibitors) for use in the field of cardiovascular medicine. Research will focus on developing small molecule inhibitors of PAI-1 that enhance the break-up of blood clots without the side effects of bleeding that occur with other marketed antithrombotic drugs.
Nisbet said Xenova's research in this field is unmatched by other drug companies.
'We really opened up this whole area,' he said. 'We have managed to create such a dominant position that really we're the only player in town.'
Michael Clayman, Eli Lilly's vice president for cardiovascular research, said Xenova's products will fit well in its cardiovascular portfolio. 'PAI-1 inhibitors have the potential to make a positive impact in the very large market for antithrombotic drugs, where products suitable for chronic use without the bleeding complications or costly monitoring requirements of current therapies are greatly needed,' he said.
Nisbet said Xenova chose Eli Lilly as its partner because of its marketing clout and its decision to take on the burden of early development costs.
'What this does for us is make sure we won't skimp on the trials and ensure that our data stands up to regulatory interrogation,' he said.
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