British Biotech and MethylGene sign agreement on phase II antisense drug.

Biotech plc (Oxford, England; 44 (0) 20 7269 7285) and MethylGene, Inc. (Montreal, Canada; 514-337-3333), a privately-held Canadian biopharmaceuticals company, announced that they have entered into a collaboration granting British Biotech the European development and commercialization rights for MG98, MethylGene's leading experimental anti- cancer drug, currently in Phase II clinical development in North America.

In addition, British Biotech has been granted an exclusive one-year option, renewable for a second year, to license preclinical compounds that emerge from MethylGene's complementary small molecule DNA Methyltransferase (DNA MT) inhibitor programme for cancer.

MG98 is a novel, second-generation, antisense compound. It is designed to disrupt the production of DNA MT, an enzyme that is implicated in uncontrolled tumor growth, by inhibiting its expression.

MG98 is currently in two Phase II trials in North America, in head and neck cancer and renal cell carcinoma (kidney cancer), and one Phase I trial in advanced myelodysplasia and relapsed/refractory acute myeloid leukaemia. These trials are being conducted by MethylGene and MGI PHARMA Inc., to whom the North American development and commercialisation rights for MG98 were granted by MethylGene in August 2000. MG98 is one of the first second-generation antisense compounds to advance into Phase II clinical trials. MG98 was well tolerated in Phase I, dose-escalation trials in a variety of solid tumours and a partial response and prolonged stable disease were observed in several patients.

A growing body of research has shown that cancer can be triggered by the silencing of genes that prevent uncontrolled tumour growth (tumour suppressors). This silencing can be caused by a chemical modification known as methylation, which is carried out by the DNA Methyltransferase enzyme (DNA MT). MG98 disrupts production of DNA MT by binding to its messenger RNA (mRNA), preventing or reversing abnormal methylation of tumour suppressor genes. In pre-clinical models MG98 inhibited the growth of human tumours when used alone and in combination with other anti-cancer agents.

In Phase I trials, MethylGene demonstrated MG98's safety and observed patient responses and changes in molecular markers attributed to treatment with MG98. These trials were run at four oncology medical centres in the United States and Canada.

Ongoing Phase II trials are being conducted by MGI PHARMA, Inc. and aim to evaluate MG98's efficacy in several tumour types. They also aim to evaluate the effects of MG98 on both the methylation status of potential tumour suppressor genes and on DNA MT mRNA levels in primary tumour biopsy samples.

The first Phase II trial was started in November 2000 and targets recurrent or metastatic squamous cell head and neck carcinoma. MG98 is administered at 240mg/m2 over 2 hours twice weekly for three weeks out of every four. Renal cell carcinoma A second Phase II trial was initiated in July 2001 to evaluate MG98 in advanced and/or metastatic renal cell carcinoma using the same regimen as above, dosing at 360mg/m2. This Canada-wide trial, conducted in collaboration with the National Cancer Institute of Canada Clinical Trials Group, targets patients who have had no prior immunotherapy or chemotherapy for advanced disease.

In January 2002 MGI Pharma and MethylGene began a 50-patient Phase I trial of MG98 in patients with advanced myelodysplasia and relapsed/refractory acute myeloid leukaemia. The study aims to assess the safety and pharmacokinetic profiles of MG98, define the optimal effective dose of MG98 in these patients and document both the biological and clinical effects of the drug.

Small molecule drugs are designed to interact with the protein molecules that support or cause diseases. Antisense drugs work at the genetic level to disrupt or prevent production of proteins that cause disease.

Antisense drugs are complementary strands of small segments of mRNA, the intermediary for the cellular transfer of the DNA code. To create antisense drugs, DNA bases, or nucleotides, are linked together in short chains (called oligonucleotides) Each antisense drug is designed to bind only to a specific sequence of nucleotides in its mRNA target to prevent translation and hence inhibit production of the disease-causing protein.

Antisense drugs therefore have the potential to be more selective or specific than traditional drugs, which interfere with the action of proteins after they are synthesised and which may also affect non-target proteins.

British Biotech will expand the MG98 Phase II programme by funding additional studies in cancers in which expression of DNA MT is implicated and will work closely with MGI PHARMA and MethylGene on further development of MG98. British Biotech and MGI PHARMA expect to share the Phase III development costs equally.

British Biotech and MethylGene have also formed an agreement on MethylGene's research programme for the design and synthesis of small molecule inhibitors of DNA MT. This complementary programme aims to produce drugs that directly inhibit the action of DNA MT, rather than inhibiting the production of the enzyme as is the case for MG98. Under the agreement between the two companies, British Biotech has secured a one-year option, renewable for a second year, to the European development and commercialisation rights for compounds emerging from this research.

Under the Licence, Development and Commercialisation Agreement, British Biotech will make an initial research and development payment to MethylGene of US$1.7 million. This will be followed by milestone payments of up to US$12.8 million based on successful regulatory approval and commercialisation for MG98 in Europe. MethylGene will also receive undisclosed royalties on sales. British Biotech will make additional equity investments, research and development payments and milestone payments to MethylGene if the option to further participate in the small molecule research programme is exercised. In addition, under a separate Stock Purchase Agreement, British Biotech will make an equity investment of US$2 million in MethylGene.

Dr Elliot Goldstein, chief executive officer of British Biotech, said: "This transaction allows us to accomplish two important objectives. First, acquisition of the development and commercialisation rights to MG98 in Europe adds a fifth compound, already in Phase II, to our clinical portfolio and takes British Biotech into an exciting new approach to cancer treatment.

Second, the research agreement provides British Biotech with access to MethylGene's strong intellectual property position and rational drug discovery capabilities and a second approach to this novel cancer target."

Donald F. Corcoran, MethylGene's president and chief executive officer, said: "MethylGene chose British Biotech as our European partner based on the quality and experience of its clinical development in cancer. By establishin this relationship with British Biotech we can capitalize on the progress already made with MGI PHARMA. We look forward to this new collaboration allowing us to aggressively pursue the clinical development of MG98 in North America and Europe as well as further expand our drug discovery efforts for additional DNA methyltransferase inhibitors."

British Biotech is a biopharmaceuticals company specializing in the development of new drugs to fight diseases with limited treatment options, principally cancer. Its strategy is to build a product portfolio of drugs from its own research and through collaboration with other companies in which it retains a share of commercialisation rights. Five products are currently in clinical development:

- MG98, in Phase II development in a variety of cancers in collaboration with MethylGene Inc., and MGI Pharma Inc.;

- BB-10901, in Phase I development for small cell lung cancer in collaboration with ImmunoGen Inc.;

- E21R, in Phase II development for acute myeloid leukaemia in collaboration with BresaGen Ltd;

- the Batimastat BiodivYsio stent, in pivotal patient trials in Europe, in collaboration with Biocompatibles International plc;

- BB-10153, a novel, thrombolytic that is planned to enter Phase II studies in Q1 2002.

The lead compounds in British Biotech's in-house antibiotic programme are peptide deformylase inhibitors in development for respiratory tract and other gram positive infections. Initiation of clinical studies with the lead compound is on track for 2002 and a collaborative partner is being sought for this programme.

British Biotech also has collaborative research and product development agreements with Schering-Plough Corporation, Serono SA, OSI Pharmaceuticals, Inc., DevCo Pharmaceuticals Ltd and Tanabe Seiyaku.

MethylGene is a privately held, Canadian biopharmaceutical and chemistry-driven rational drug design company focused on the inhibition of quality enzyme targets associated with disease. MethylGene combines functional genomic technologies with the application of mechanism-based small molecules and mRNA inhibitors to discover, patent , develop and commercialize novel therapeutics for cancer and infectious disease. MethylGene's lead compound, MG98, which is partnered for North America with MGI PHARMA and for Europe with British Biotech, is currently in Phase II clinical trials. The company has other research and development programs to develop small molecule inhibitors of DNA Methyltransferases, Histone deacetylases, beta-lactamases and other enzyme targets.

MGI PHARMA is an oncology-focused pharmaceutical company that acquires, develops and commercializes proprietary products that address unmet cancer patient needs. MGI is building a balanced product portfolio of proprietary pharmaceuticals, and intends to become a leader in oncology. The company focuses its sales efforts solely in the United States and collaborates with other pharmaceutical or biotechnology companies for its products in international markets.