Teva buys rights to Mersana's potential cancer drug XMT-1107 for up to $344 million

In a further move into specialty drugs, the world's largest generic drugmaker, Teva Pharmaceutical Industries, has entered into an agreement with US drug developer Mersana Therapeutics for rights to develop and commercialize XMT-1107, a novel fumagillin analog, for the treatment of all indications, including cancer.

Under the terms of the deal, Teva will receive an exclusive license to XMT-1107 for all indications worldwide, excluding Japan, for which Mersana will retain rights. Mersana will be eligible to receive up to $334 million if all development, regulatory and commercial milestones are met across several indications. In addition, the US firm will be eligible to receive royalties on future net sales worldwide of any drug commercialized. Teva will cover all development costs for XMT-1107, excluding those specific to Japan.

Mersana plans to initiate a Phase I clinical trial for XMT-1107 in the second quarter of 2010. XMT-1107 will be the company's second oncology product to enter the clinic. Mersana's XMT-1001, a conjugate of Fleximer and camptothecin (CPT), is currently completing a Phase I study.