Roche and Genentech sign oncology deal with OSI valued at $187 million

Roche of Switzerland has signed an agreement with Genentech and OSIPharmaceuticals to co-develop and market the epidermal growth factor receptor inhibitor OSI-774, the latter's treatment for non-small cell lung, ovarian, head and neck cancers, in a deal valued at up to $187 million.

OSI acquired full development and marketing rights to OSI-774 (then called EGFR-tk inhibitor, CP-358,774) back from partner Pfizer, which was forced to divest the drug as part of its merger with Warner-Lambert last year (Marketletter June 26, 2000). OSI-774 is currently in Phase II trials.

Under the terms of the agreement, Genentech and Roche have each agreed to purchase $35 million of OSI common stock and will pay upfront fees. Other payments would be made after certain goals are reached, such as regulatory approval, making the deal potentially worth $187 million. Although OSI has retained certain co-promotion rights in the USA, Genentech will be primarily responsible for commercializing the product there, while Roche will undertake the task of gaining regulatory approval and marketing in territories outside the USA.