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Transgene, Jennerex In Cancer Fighting Virus Partnership

French biotech firm Transgene SA (TNG.FR) and privately-held U.S. cancer drug developer Jennerex Inc. Wednesday announced a partnership to develop and sell in Europe, Russia and the Middle East an experimental treatment to target and kill cancer cells.

The two in a joint statement said they'll co-develop Jennerex's JX-594, a cancer-battling virus that has shown promise in early-stage trials for variety of cancers, including liver, colon, kidney, lung and melanoma.

Under the agreement the French biotech firm has taken an equity stake in Jennerex. The U.S. company could earn up to $116 million in milestone payments and double-digit royalties under the arrangement. Jennerex also has an option for co-promotion and profit-sharing in the five major European countries and retains U.S. rights to the drug.

"With a time to market in Europe forecast for 2015 and a European market potential of over $1 billion, JX-594 has the capacity to provide us with a very substantial return on our investment, should the product meet all of its milestones," Transgene Chief Executive Philippe Archinard said.

Jennerex's Chief Executive David Kirn said "by applying Transgene's depth of knowledge and experience in the development of immunotherapies, as well as its established relationships with European regulatory authorities, we believe that we can achieve JX-594 marketability more quickly."

Their development plan for JX-594 will focus first on Hepatocellular Carcinoma, both in first-line and second-line treatment, and on colorectal cancer.

Transgene and Jennerex said they plan a large randomized controlled Phase 2b/3 clinical program in patients with Hepatocellular Carcinoma, as well as a Phase 2 study in colorectal cancer patients who don't react to, or who are intolerant to, Merck KGaA's oncology drug Erbitux.

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