Teva Pharmaceutical Industries, OncoGenex Pharmaceuticals announce collaboration in cancer therapy

Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) and OncoGenex Pharmaceuticals, Inc. (NASDAQ: OGXI) announced today that they have entered into a global license and collaboration agreement to develop and commercialize OGX-011, as well as an agreement to purchase shares in OncoGenex. OGX-011 is a Phase III cancer therapy designed to inhibit cancer treatment resistance. OGX-011 is expected to be used as adjunct therapy to enhance the effectiveness of chemotherapy and has shown promising results when added to currently available chemotherapies in several tumor types addressing a significant unmet medical need.

“We see OGX-011 as a key component of our branded oncology medicines franchise, expanding our pipeline of existing oncology therapeutics and broadening the future available therapies made by Teva for oncology patients and care providers”

The agreement will further enhance Teva’s oncology offerings and strengthen its global branded product pipeline with a promising product candidate entering three Phase III trials involving large patient populations. Teva and OncoGenex will collaborate on a global Phase III clinical program, with two Phase III clinical trials expected to be initiated in 2010: a Phase III Study for Second-line Chemotherapy in Men with Metastatic Castrate Resistant Prostate Cancer (CRPC) and a Phase III Study in First-Line Chemotherapy for Metastatic CRPC. An additional Phase III Study in First-Line Treatment of Advanced, Unresectable Non-Small Cell Lung Cancer (NSCLC) is intended to be initiated by early 2011.

Under the terms of the collaboration and share purchase agreements, Teva will provide OncoGenex with a $60 million initial cash payment, which includes a $10 million equity investment in OncoGenex common stock at a price of $37.38 per share, upfront payment of $20 million and prepayment of $30 million for OncoGenex’s contribution to the development costs of OGX-011. OncoGenex will be eligible to receive up to $370 million in additional cash payments upon achievement of various milestones, including regulatory milestones and sales targets. In addition, OncoGenex will receive tiered royalties on sales of the product with the royalty percentage ranging from the mid-teens to the mid-twenties, depending upon the amount of net sales. Teva is responsible for all commercialization and development expenses. OncoGenex retains an option to co-promote OGX-011 in the U.S. and Canada.

“We see OGX-011 as a key component of our branded oncology medicines franchise, expanding our pipeline of existing oncology therapeutics and broadening the future available therapies made by Teva for oncology patients and care providers,” said Moshe Manor, Teva's Group VP, Global Branded Products. “OGX-011 is supported by compelling data demonstrating the drug’s ability to benefit patients on top of several currently available chemotherapies in a number of oncology indications. In addition to prostate cancer, we are particularly enthusiastic about the therapeutic activity seen in the Phase II clinical trial in lung cancer.”

“Together with Teva, we have forged a strong path moving forward for the development of OGX-011 that commits significant cash investment to a broadened Phase III clinical development plan that includes first- and second-line castrate resistant prostate cancer as well as non-small cell lung cancer,” said Scott Cormack, President and CEO of OncoGenex. “The agreement provides us with capital resources for the development of OGX-011 through completion of the Phase III clinical trials and into product commercialization. We’re creating a solid foundation to maximize the broad potential of OGX-011 and bring this important treatment option to cancer patients.”