Bayer snares Algeta's lead cancer med in $800M pact

In a fresh sign of just how hot cancer meds have become, Bayer Schering Pharma took analysts by surprise this morning with an $800 million licensing pact for Algeta's lead drug--an experimental therapy that targets cancerous bone cells. Bayer will pay $61 million of that upfront for Alpharadin, a prospective blockbuster which uses alpha rays to eliminate cancer cells.

Norway's Algeta also stands to earn double-digit royalties on sales of Alpharadin and has an option to switch from royalties to a split of the profits in the U.S. market. "This is an extremely positive deal, the size is significant and far larger than what we had expected," DnB NOR Markets analyst Espen Joergensen commented.

Alpharadin is an alpha-emitting radiopharmaceutical, based on radium-223. The drug is currently being evaluated in a global Phase III trial for the treatment of bone metastases in symptomatic hormone-refractory prostate cancer patients. "We recognize the tremendous potential of Algeta's Alpharadin as a possible treatment for bone metastases in cancer patients--a serious, life-threatening condition," said Kemal Malik, head of global development at Bayer Schering Pharma. "The data we have seen suggest that Alpharadin represents a highly targeted treatment option with convenient handling and manageable side effects. Bayer is committed to its global oncology franchise and has made significant progress in building a comprehensive pipeline of promising compounds that may provide innovative therapies to cancer patients in need of treatment."

- check out the press release
- read the report from Reuters