Transgene sells option on cancer vaccine to Novartis

STRASBOURG, France — Transgene SA, a French biotechnology company, sold Novartis AG an option on rights to the experimental TG4010 lung cancer vaccine in a deal that may fetch as much as $960 million, Bloomberg reported.

Novartis will pay an initial $10 million for a worldwide license, Transgene said March 10. Transgene may get $950 million if Novartis exercises the option and the product meets agreed-on goals.

Transgene has been seeking a partner to help develop TG4010 for more than a year.

The U.S. Food and Drug Administration in December granted the vaccine fast-track status, meaning a shortened review for a product it deems may be better than available treatments.

Transgene will fund the next phase of the product?s development and retain control of it until early 2012, when the first results of the trial emerge. Novartis will then have 90 days to exercise its option, Transgene said.

CEO Philippe Archinard said measures to ensure the researchers identify patients who may respond best to the treatment will help reduce the risk of the drug failing.

TG4010 is designed to attack lung cancer by stimulating patients? immune systems. The shot helped prolong median survival time by about six months in people with normal levels of a type of immune cell known as natural killer cells in a mid-stage study, Transgene said in February 2009. Twice as many patients responded to treatment with TG4010 as with chemotherapy alone, the company said.

Lung cancer kills about 1.3 million people each year, more than any other malignancy, according to the Geneva-based World Health Organization. About 85 percent of patients die within five years of diagnosis.

TG4010 is being tested in non-small cell lung cancer, which accounts for about 80 percent of lung cancers.

GlaxoSmithKline Plc of London began the final trials of its MAGE-A3 vaccine for lung cancer in 2007 and for melanoma in 2009. Merck KGaA, based in Darmstadt, Germany, and not affiliated to Merck & Co. of Whitehouse Station, N.J. — began late-stage tests of its Stimuvax vaccine in lung cancer in 2007 and in breast cancer last year.