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Bayer, Ardea MEK-ing progress
BERLIN—Late April saw Bayer HealthCare AG of Germany enter into a global agreement with San Diego Calif.-based Ardea Biosciences Inc. that will concentrate on the development of small molecule mitogen-activated ERK kinase (MEK) inhibitors for the treatment of solid tumors.
The lead compound that is center stage in this program, RDEA119, is currently being evaluated in advanced cancer patients of different tumor types as a single agent in a Phase I study as well as in combination with sorafenib (Nexavar) from Onyx Pharmaceuticals in a Phase I/II study, the results of which are expected in the second half of this year. MEK is believed to play an important role in cancer cell proliferation, apoptosis and metastasis—and is also believed to play a role in inflammation.
RDEA119 is Ardea's lead compound from its MEK inhibitor research and development program, and preclinical and clinical results suggest that RDEA119 has favorable properties, including a long half-life, oral dosing, excellent selectivity and limited retention in the brain. This latter property indicates that RDEA119 will present a reduced risk of central nervous system side effects, notes Ardea President and CEO Barry D. Quart.
Under the terms of the agreement, Ardea will grant Bayer a worldwide, exclusive license to develop and commercialize Ardea's MEK inhibitors for all indications. Potential payments to Ardea could reach $407 million, not including royalties. This amount includes an upfront cash payment to Ardea of $35 million, as well as additional cash payments upon achievement of certain development, regulatory and sales-based milestones.
In addition, Ardea is also eligible to receive low double-digit royalties on sales of products under the agreement.
"We are very excited about the potential use of MEK inhibitors to treat a broad range of cancer indications," says Kemal Malik, head of global development and member of the Bayer HealthCare Executive Committee. "We are looking forward to working with Ardea's team on the development of novel cancer treatments for patients."
Quart adds that "RDEA119 has demonstrated compelling synergistic activity in vitro in combination with sorafenib, as well as other approved anti-cancer agents, and we look forward to working with Bayer as a globally successful company in the field of targeted anti-cancer therapies to evaluate multiple drug combinations in several cancer indications."
Other terms of the deal call for Ardea to be responsible for the completion of the Phase I and Phase I/II studies currently underway for RDEA119. After that, Bayer will be responsible for the further development and commercialization of RDEA119 and any of Ardea's other MEK inhibitors.
Analyst Grant Zeng of Zacks Investment Research notes that Ardea also has a MEK Inhibitor (MEKI) Back-up Program, the compounds of which are from several chemical classes that are distinct from the RDEA119 chemical class. Based on early preclinical data, Zeng writes, "it is believed that RDEA436 may potentially share certain of the positive attributes of RDEA119, and may have even greater potency than RDEA119."
While the news clearly is positive to Ardea, Zeng points out, strengthening as it does the company's sheet, he also reminded investors that Ardea is still an early-stage development company, with a long road before it brings any product into market, so Zacks remained neural on the company's share value.
As of December 31, 2008, Ardea had $57.7 million in cash, cash equivalents and short-term investments, with cash burn of $46.8 million in 2008. Management Ardea management anticipates 2009 net cash usage to be between $38 million and $43 million, and it is expected that the current level of cash and cash equivalents will be sufficient to meet Ardea's funding needs until the second quarter of 2010.