Genentech licenses Xenova immune technology

Genentech has entered into a deal, valued at $63 million, to license atechnology platform developed by UK firm Xenova, with potential in the treatment of disorders affecting the immune system. The agreement provides the US biotechnology major with worldwide rights to develop and market products based on Xenova's OX40 receptor protein and anti-OX40 ligand antibody programs.

Xenova's shares put on a 9% gain in early trading on the day of the announcement (April 23) to 65.5 pence, as investors reacted to the fourth licensing deal for the firm in the last few months. Last August, Xenova licensed rights to tariquidar (XR9576) for the treatment of multidrug resistance in cancer to Canada's QLT for $105 million, while its joint-venture company Phogen signed a $21 million deal with Genencor for the application of Phogen's VP22 technology to the development of therapeutic vaccines for viral disease. In addition, last December the firm entered into a North American licensing deal with Millennium Pharmaceuticals for a novel DNA targeting agent program, providing $11.5 million in an upfront payment plus potential milestone revenues (Marketletters passim). Genentech's agreement includes a $5 million upfront payment, as well as tiered royalties on eventual sales.

Analysts said the deal was a welcome upside surprise for Xenova, particularly as Genentech's license only covers immune applications of the technology. The UK firm retains rights to the proteins in oncology and other uses. OX40 and its ligand are a pair of cell-surface co-stimulatory proteins which are believed to be important for the induction and regulation of immunity. Drugs which target them are expected to regulate the T cell/ antigen-presenting cell interaction which plays a key role in autoimmune diseases, cancer and infections.