Pharmacyclics, Servier call it quits on a cancer drug

Pharmacyclics ($PCYC) and Servier are quietly walking away from a 5-year collaboration on a new cancer treatment, leaving the former company to go it alone on mid-stage oral drug with an uncertain future.

Under the initial deal, signed in 2009, Servier paid $15 million and promised $24.5 million more for the ex-U.S. rights to abexinostat, which fights cancer by blocking a group of enzymes called HDACs. Servier was on the hook for all non-U.S. development costs, and both parties touted the drug's potential in both solid tumors and blood cancers.

Now, as the two dissolve their partnership--"mutually and amicably," according to a joint statement--Pharmacyclics is left with an unpartnered drug in the midst of Phase II trials on follicular lymphoma and mantle cell lymphoma, and the company is yet to decide how to proceed.

"Now that we have full ownership of the abexinostat asset, we will enter a period of further evaluation to determine its usefulness in oncology," Pharmacyclics CEO Bob Duggan said in a statement.

The drug's fate is tied in part to a pending patent issue. Before the end of the partnership, Servier filed a provisional application with U.S. regulators that would extend abexinostat's patent protection to 2034, Pharmacyclics said. The company is awaiting word on that effort and expects to provide an update on the treatment's future in mid 2015.

The uncertainty surrounding abexinostat clouds the potential of Pharmacyclics' pipeline, which, beyond its blockbuster collaboration with Johnson & Johnson ($JNJ), is a little thin. The company has two other clinical assets--the Phase II PCI-27483 for cancer and an unnamed Phase I treatment for autoimmune disorders--and another 5 preclinical candidates in the lead-optimization stage.

But the success of its lead product, the J&J-partnered Imbruvica, gives Pharmacyclics more than a little breathing room. The drug, approved for chronic lymphocytic leukemia and mantle cell lymphoma, brought in $109.5 million for the biotech last quarter, and Pharmacyclics has banked about $505 million in milestone payments since out-licensing the treatment. Alongside J&J, the company is studying Imbruvica in four more cancers, and it's in line for another $320 million if all goes according to plan, plus a cut of sales.

- read the statement

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