A Lake Forest-based biotech company Thursday said it terminated a licensing agreement with the world’s largest drug company, ending a pact to develop cancer drugs.
NeoPharm Inc. said the rights to develop new applications for a widely used cancer drug will no longer be shared with Pfizer Inc.
The change will allow the biotech company to control development of the drug, liposome-encapsulated paclitaxel, on its own. NeoPharm also gained the rights to a second compound but has no immediate plans to develop it.
NeoPharm and Pharmacia Corp., which Pfizer bought last year, had been squabbling since 1999 about the licensing agreement. NeoPharm had claimed Pharmacia held up the development of the cancer compounds. Pharmacia denied the allegations.
Earlier this year, an arbitrator dismissed claims each company made against the other, leaving the companies to iron out a deal. As part of the termination agreement announced Thursday, Pfizer will not pay any damages while NeoPharm gets sole rights to the compounds, NeoPharm said.
“Pfizer is just returning the drugs at no cost,” said Greg Young, NeoPharm’s president and chief executive officer.
NeoPharm said it now is free to pursue development and marketing arrangements with other large drug companies.
Small biotech companies like NeoPharm need to partner with larger companies and their giant sales marketing operations of thousands of sales representatives to get their products to market.
NeoPharm still has high hopes for the compound, which encapsulates the popular generic cancer drug paclitaxel in a ball of fat to reduce side effects and possibly increase effectiveness.
Paclitaxel is the generic of Bristol-Myers Squibb & Co.’s popular cancer drug Taxol.
Young said NeoPharm hopes to begin in October a head-to-head clinical study of 100 patients, comparing the safety and effectiveness of its liposome-encapsulated paclitaxel against Taxol.
Depending on the outcome of those studies, NeoPharm could seek U.S. approval by 2007.
“Now that this has been terminated, it allows us to go to other companies and explore partnerships,” Young said.
Shares of NeoPharm rose 3.6 percent, or 25 cents, to close at $7.15 on the Nasdaq market.
