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Aphton to Expand Licensing and Commercialization Agreements into Europe for IGN311 Feb 7, 2006 10:26:00 AM Copyright Business Wire 2006 PHILADELPHIA--(BUSINESS WIRE)--Feb. 7, 2006--
Agreement to Include Substantial Amount of Contribution with the Potential of at Least $40 Million Value in Cash, Milestones, and Development Costs, Including $5 Million up Front Payment Aphton Corporation (Pink Sheets:APHT) announced today that its wholly-owned subsidiary, Igeneon, signed a letter of intent with Celltrion to amend their existing licensing and commercialization agreements for the clinical product candidate, IGN311, a humanized monoclonal antibody against the Lewis-Y carbohydrate antigen and Igeneon's next-generation antibody, IGN312.
Under the original agreements, which closed in November 2005, Igeneon granted Celltrion an exclusive license to commercialize IGN311 in certain Asian countries, including Japan, in exchange for future milestone payments and royalties from Celltrion. In addition, under the original agreements, Celltrion will provide development and manufacturing services related to the optimization and upscaling of IGN311 as well as material for further clinical development.
Under the terms of the letter of intent, Igeneon would expand the existing license to permit Celltrion to commercialize IGN311 in Europe as well as grant Celltrion an additional license to commercialize Igeneon's next-generation antibody, IGN312, in Europe and certain countries in Asia, including Japan. In addition, for a period of time to be determined, Celltrion would have a right of first refusal to further develop and commercialize IGN101, which is Igeneon's cancer vaccine that is currently in a 760 patient Phase II/III clinical trial. In return, Igeneon would receive from Celltrion an up front payment of $5 million and milestone payments of up to $15 million. In addition, Igeneon would receive royalties on sales of each product in both territories and Celltrion would assume all clinical development costs for IGN311 in both territories. The companies intend to initiate Phase I and Phase II clinical trials of IGN311 in Asia in the near future.
The signing of the definitive agreement is pending approval of the Boards of Directors of both Aphton and Celltrion.
"We believe the expansion into Europe of our existing collaboration with Celltrion is validation of both the IGN311 and IGN312 franchises," commented Patrick Mooney, MD, President and Chief Executive Officer of Aphton. "By committing to pay up to $20 million in up front and milestone payments, plus assuming all development costs of IGN311 in Europe and Asia, we believe that Celltrion is making a significant statement about its belief in the potential of these products. In addition, Aphton would retain the rights to the products in North and South America and the rest of the world, which, based on the current terms of this expansion, would provide us with a tremendous opportunity in the future."
About IGN311 and IGN312
IGN311 is a humanized monoclonal antibody against the Lewis Y carbohydrate antigen, a blood-group-related oligosaccharide. Lewis Y is over-expressed in up to 90% of all epithelial cancers and its expression on adult normal tissues is very restricted; hence IGN311 has the potential to target a broad range of carcinomas. IGN311 is designed to exert clinical effects by destruction of tumor cells by activation of effector functions and by selective growth inhibition via functional receptors. IGN312 is a next-generation antibody based on IGN311.
About Aphton Corporation
Aphton Corporation, headquartered in Philadelphia, Pennsylvania, is a clinical stage biopharmaceutical company focused on developing targeted immunotherapies for cancer. Aphton's products seek to empower the body's own immune system to fight disease. Through the acquisition of Igeneon GmbH (formerly Igeneon AG) in March 2005, Aphton acquired late-stage products, IGN101, a cancer vaccine designed to induce an immune response against EpCAM-positive tumor cells, as well as IGN311 and IGN312. Aphton has strategic alliances with Xoma for treating gastrointestinal and other gastrin-sensitive cancers using anti-gastrin monoclonal and other antibodies; Daiichi Pure Chemicals for the development, manufacturing and commercialization of gastrin-related diagnostic kits; and Celltrion for the development, manufacturing and commercialization of IGN311 in certain countries in Asia. Aphton's most advanced product, Insegia(TM), targets the hormone, gastrin 17, in an attempt to treat gastrointestinal cancers. Aphton is currently seeking partners to support the further development of Insegia. For more information about Aphton or its programs please visit Aphton's website at http://www.aphton.com.
Safe Harbor
This press release includes forward-looking statements within the meaning of the federal securities laws, including statements about Aphton's expectations regarding: (1) Aphton's and Celltrion's intention to enter into a definitive agreement containing the terms set forth in the letter of intent; (2) the potential for Aphton to recognize at least $40 million value in cash, milestones, and development costs from the expansion of the Celltrion collaboration, including $5 million in up front payments and up to $15 million in milestone payments; (3) the potential benefits to Aphton resulting from expansion of the licensing and commercialization agreements; (4) Aphton's and Celltrion's intention to initiate Phase I and Phase II clinical trials of IGN311 in Asia in the near future; (5) Aphton's belief that the expansion of its existing collaboration with Celltrion validates both the IGN311 and IGN312 franchises; (6) Aphton's belief that Celltrion is making a significant statement about its belief in the potential of IGN311 and IGN312 by committing to pay up to $20 million in up front and milestone payments, plus assuming all development costs of IGN311 in Europe and Asia; (7) Aphton's belief that based on the current terms of the expansion, retaining the rights to IGN311 and IGN312 in North and South America and the rest of the world would provide it with a tremendous opportunity in the future; (8) the potential of IGN311 to target a broad range of carcinomas, destroy tumor cells, and exert clinical effects by destruction of tumor cells; (9) Aphton's belief in gastrin, the Lewis Y carbohydrate and EpCAM as viable targets in treating cancer; (10) Aphton's expectation regarding the purpose and effectiveness of its cancer vaccine IGN101, its fully-humanized antibody, IGN311, and its cancer immunotherapy, Insegia; and (11) Aphton's intent to seek partners to further support the development of Insegia. These forward-looking statements may be affected by risks and uncertainties that could cause the actual results to differ materially from those expressed in such forward-looking statements. Aphton undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof. This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in Aphton's Securities and Exchange Commission filings, including Aphton's report on Form 10-K filed with the Commission on March 16, 2005. With respect to Aphton's expectations regarding the expansion of the licensing agreement, these risk factors include, but are not limited to: the ability of Aphton and Celltrion to reach a final agreement based on the terms contained in the letter of intent and the willingness of the Boards of Directors of both companies to approve the terms of such definitive agreement. With respect to Aphton's expectations regarding the aggregate amount of milestone payments Aphton will ultimately receive under the expanded licensing agreement and the total value of the agreement to Aphton, these risks include: (1) the ability of Aphton and Celltrion to successfully collaborate in the research, development, manufacturing and commercialization of IGN311 and/or IGN312; (2) the timing or results of ongoing and future clinical trials for IGN311 and/or IGN312, as certain milestone payments will become due upon the initiation of each phase of the IGN311 clinical trials and upon filing of applications for regulatory approval which itself is dependent on the successful outcome of the clinical trials; (3) the ability of Aphton and Celltrion to obtain regulatory approval for IGN311 and/or IGN312, and (4) the ability and willingness of Celltrion to continue to fund the research, development, manufacture and commercialization of IGN311 and/or IGN312. With respect to the statements regarding the long-term prospects of IGN311 and IGN312, these risks include: (1) the ability to gain commercial acceptance of IGN311 and/or IGN312; (2) the risks and uncertainties inherent in the drug development process and in Aphton's and Celltrion's respective businesses; (3) the ability of Celltrion and any approved third parties to manufacture and supply IGN311 and/or IGN312 in commercial quantities; (4) Aphton's ability to capitalize on any opportunity the expansion of the Celltrion collaboration would present in North or South America or throughout the rest of the world; and (5) intellectual property risks.
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