Ardea earns $15 million milestone from Bayer as BAY 86-9766 moves into Ph II

Ardea Biosciences (Nasdaq: RDEA) saw its shares leap 9.9% to $28.66, after saying that it has earned a $15 million milestone payment from German drugs and chemicals major Bayer (BAY: DE) under the terms of their April 2009 global license agreement to develop and commercialize the US firm’s mitogen-activated ERK kinase (MEK) inhibitor compounds for cancer and other indications.

This milestone was triggered by the initiation of a Phase II clinical study evaluating BAY 86-9766 in combination with Nexavar (sorafenib), Bayer and Onyx Pharmaceuticals’ treatment of hepatocellular carcinoma, or primary liver cancer.

On receipt of this $15 million, which is expected shortly, Ardea will have received license fee and milestone payments under the agreement with the Bayer HealthCare unit totaling $50 million. Ardea is eligible to receive up to an additional $357 million for achievement of future development and commercialization milestones, including $7.5 million for the initiation of a second Phase II clinical study of BAY 86-9766 for a different indication. It may also receive low double-digit royalties on worldwide sales of products under the license agreement.