Chemgenex and Stragen Pharma to create alliance

Melbourne- and Californian-based ChemGenex Pharmaceuticals (ASX:CXS) has formed an international alliance with Geneva-based Stragen Pharma to accelerate the clinical development of ChemGenex's lead anti-cancer therapeutic, Ceflatonin.

Ceflatonin is currently in a Phase II clinical trial at the MD Anderson Cancer Center in Houston, Texas treating chronic myeloid leukemia (CML) patients who are resistant to Novartis' drug Gleevec. In addition to CML, Ceflatonin has established clinical activity against other haematological malignancies (blood cell cancers).

ChemGenex, whose American Depositary Receipts begin trading on the NASDAQ SmallCap Market today, will be responsible for the global clinical development of Ceflatonin, as well as registration and marketing in North America and the Asia-Pacific.

Stragen will be responsible for drug production and global supply, as well as facilitating regulatory approvals within Europe. ChemGenex will also use Stragen's European clinical network to accelerate the development of Ceflatonin.

"The first thing is that it ties up manufacturing for us in a big way," said ChemGenex CEO and managing director, Greg Collier. "All the risk in terms of producing a drug at that level for sale has gone. And that's not an insignificant risk for a small biotech company."

"[Stragen] also have a marketing force and a distribution force already established," he said.

In addition, Stragen has 20 clinical centres throughout Europe and the UK which will enable ChemGenex to take over clinical management of Ceflatonin in Europe as well as the US, and accelerate the drug's development in clinical programs, Collier said.

"It's accelerated our program for CML somewhere between six and twelve months," said Collier. The company hopes to enter registration trials for Ceflatonin in CML before the end of this year, rather than later in 2006 as was previously planned, he said.

"We've also expanded the clinical program for Ceflatonin and inherited from our alliance in Europe the opportunity to move into other leukemia."

Once Ceflatonin is approved in Europe, ChemGenex and Stragen will market the product under the ChemGenex brand. The profits for Europe will be split between the two companies, with Stragen taking 51 per cent and ChemGenex taking 49 per cent.

"We will share in the rights throughout Europe when we're selling the drug but we'll maintain 100 per cent of the commercialisation rights outside Europe," said Collier.