Adherex Technologies Inc.
TSX : AHX
AMEX : ADH

Adherex Technologies Inc.

July 15, 2005 07:30 ET

Adherex Announces Licensing Deal With GlaxoSmithKline-GSK Makes Equity Investment in Adherex

RESEARCH TRIANGLE PARK, NORTH CAROLINA--(CCNMatthews - July 15, 2005) - Adherex Technologies Inc. (AMEX:ADH)(TSX:AHX), a biopharmaceutical company with a broad portfolio of oncology products under development, today announced that the Company has entered into a licensing and development agreement with GlaxoSmithKline (NYSE: GSK) for the in-license by Adherex of GSK's oncology product, eniluracil, and an option for GSK to license Adherex's lead biotechnology compound, ADH-1 (Exherin™). In addition, GSK has invested US$3 million in Adherex's previously announced private placement.

Under the agreement, Adherex received an exclusive license to eniluracil for all indications, and GSK retains options to buy back the compound at various points in time during its development. If GSK exercises any of its options on eniluracil, Adherex will receive development and sales milestone payments of up to approximately US$120 million in aggregate, plus up to double-digit royalties, depending upon if and when an option is exercised. If GSK does not exercise its buy-back options, Adherex would be free to develop eniluracil alone or with other partners and would pay GSK development and sales milestone payments and double-digit royalties.

Adherex also agreed to grant to GSK an option to receive a worldwide, exclusive license for Adherex's lead biotechnology compound, ADH-1. If GSK exercises the ADH-1 option and negotiates a license agreement with Adherex, Adherex would receive upfront, development and sales milestone payments of up to approximately US$100 million in aggregate, plus double-digit royalties. ADH-1 is now in Phase Ib/II and Phase II trials after its initial Phase I trial demonstrated encouraging evidence of anti-tumor activity.

"Either of these licensing deals would be of major importance for Adherex alone, but the combination is a transforming event for the Company. We have acquired a product with a significant market opportunity from GSK and have granted an option for our lead biotechnology drug to a major, multi-national pharmaceutical company," said William P. Peters, M.D., Ph.D., Chairman and CEO of Adherex. "The in-licensing of eniluracil provides Adherex with potential 'blockbusters' on both sides of our business: ADH-1 from our cadherin-based biotechnology platform and eniluracil from our specialty pharmaceuticals portfolio."

Peters continued, "Eniluracil adds a late-stage product opportunity with major market potential to Adherex's specialty portfolio, with Phase III development beginning as early as 2007. We believe that eniluracil will make 5-fluorouracil (5-FU), currently a mainstay first-line therapy for many solid cancers, safer, more effective and orally active. If GSK exercises its option for ADH-1, GSK would assume development of the drug which we anticipate would improve the commercial potential of this asset. All told, this deal validates the depth of our knowledge of oncology products and our ability to identify and capitalize on unique opportunities in the oncology arena."

Eniluracil is an investigational drug under development for the treatment of patients with cancer. Eniluracil may enhance the therapeutic value of 5-FU by making the drug orally active with fewer side effects and, based on recently generated preclinical data, has the potential to improve its effectiveness. 5-FU is one of the most commonly used oncology drugs in the world, currently used as first-line therapy for solid tumors, such as colon, rectal, breast, gastric, head and neck, ovarian, and basal cell cancer of the skin, among others. The use of 5-FU in combination with eniluracil may also offer the opportunity to broaden the types of cancer in which 5-FU has been shown to be active.

GSK's clinical development program for the combination of 5-FU and eniluracil met with success in early development. However, two Phase III trials displayed suboptimal efficacy and development was stopped. New scientific data obtained subsequent to those Phase III trials may account for the early suboptimal efficacy and provide a basis for enhancing the effectiveness of the combination. This proprietary data forms the basis of a patent application by Adherex, which claims that the combination of eniluracil and 5-FU has the potential to be more effective than 5-FU alone when used in accordance with Adherex's proprietary and trade secret methods.

ADH-1 targets N-cadherin, a molecule present on certain tumor cells and on the established blood vessels that are the life support of tumors. Importantly, ADH-1 may have utility in a wide variety of cancers where N-cadherin is expressed including breast, lung, ovarian and melanoma, among others.

Conference Call

Adherex will host a conference call today at 11 a.m. ET to discuss recent corporate events including the licensing agreement with GlaxoSmithKline. This call will be webcast live via the Internet at www.adherex.com. The event will also be archived and available for telephone replay through midnight on July 20, 2005 and webcast replay through July 15, 2006.



Live Participant Dial In (Toll Free, Canadian and US callers):
800-946-0713
Live Participant Dial In (International): 719-457-2642
Conference Passcode: 6007418
Replay Number (Toll Free): 888-203-1112
Replay Number (International): 719-457-0820
Replay Passcode: 6007418


About Adherex Technologies

Adherex Technologies Inc. is a biopharmaceutical company dedicated to the discovery and development of novel cancer therapeutics. We aim to be a leader in developing innovative treatments that address important unmet medical needs in cancer. We currently have four products in the clinical stage of development, including ADH-1 (Exherin™) and sodium thiosulfate (STS). ADH-1, our lead biotechnology compound, selectively targets N-cadherin, a protein present on certain tumor cells and established blood vessels that feed solid tumors. Importantly, ADH-1 may have utility in a wide variety of cancers where N-cadherin is expressed including breast, lung, ovarian and melanoma, among others. STS, a drug from our specialty pharmaceuticals pipeline, protects against the disabling hearing loss that can often result from treatment with platinum-based chemotherapy drugs. With a diversified portfolio of unique preclinical and clinical-stage cancer compounds and a management team with expertise in identifying, developing and commercializing novel cancer therapeutics, Adherex is emerging as a pioneering oncology company. For more information, please visit our website at www.adherex.com.

This press release contains forward-looking statements that involve significant risks and uncertainties. The actual results, performance or achievements of the Company might differ materially from the results, performance or achievements of the Company expressed or implied by such forward-looking statements. Such forward-looking statements include, without limitation, those regarding the milestone payments and royalties that may become payable to the Company under the agreement with GSK as well as the development plans of the Company and the expected timing and results of such development. We can provide no assurance that such payments will be made or the development will proceed as currently anticipated or that the expected timing or results of such development will be realized. We are subject to various risks, including those inherent in the biopharmaceutical industry, the early stage of our product candidates, the uncertainties of drug development, clinical trials and regulatory review, our reliance on collaborative partners, our need for additional capital to fund our operations, and our history of losses. For a more detailed discussion of related risk factors, please refer to our public filings available at www.sedar.com and www.sec.gov.

Contact Information

  • Adherex Technologies Inc.
    Melissa Matson
    Director, Corporate Communications
    (919) 484-8484
    matsonm@adherex.com