Champions Biotechnology, Cephalon initiate technology collaboration

BALTIMORE—Champions Biotechnology, Inc. and Cephalon, Inc.have entered into a technology collaboration agreement based on two ofCephalon's proprietary chemical compounds: CEP-32496, an inhibitor of mutantB-Raf, and CEP-37440, a selective dual ALK-FAK inhibitor. Champions will testthese compounds in low passage Tumorgraft studies to gauge the activity orresponse in potential clinical indications, and Cephalon will use the resultsof the studies to inform the compounds' clinical development paths.

Per the agreement, Champions will receive $1.39 million fromCephalon by April 15 of this year as an initiation fee. Champions also standsto receive additional payments upon the achievement of certain milestones, andpotential milestone payments will total $27 million. Cephalon will also payroyalties to Champions on any commercialized products that are developed as aresult of the agreement. The collaboration follows right on the heel's of Cephalon'srecent purchase of Gemin X, and obviously coincides nicely with its pipelinefocus on oncology research.

"Our collaboration with Champions Biotechnologysignificantly compliments our oncology discovery capabilities by providingwider access to more clinically relevant and predictive pre-clinical oncologymodels," says Dr. Jeffry Vaught, Cephalon's executive vice president forR&D.

Champions asserts that their Tumorgraft servicehas the potential to "accelerate and reduce the risk of oncology drugdevelopment." Tumorgrafts are the result of human tumors implanted into immunedeficient mice and then propagated in a manner that maintains the human tumor'scharacteristics. The company feels that the Tumorgrafts are a close reflectionof human cancer biology, and their website goes on to add that "studies usingChampions Tumorgrafts have been shown to predict how experimental drugs performin clinical settings with results correlating directly with actual clinicalresults and positive outcomes in patients."

"We are very excited to be partnering with an innovativecompany like Cephalon that can utilize our technology to improve the process ofoncology drug development," says Guy Malchi, Champions' head of corporatedevelopment.

According to the company, Champions' Tumorgrafts offer theability to test cancer drugs on tumor cells that are near replicas of the onesfound in the patient's body, allowing them to determine the drugs' efficacy andalso to determine any sensitivity and likely effects of the drug on a patient'sbiology. It is also possible to test singular and combination drug therapy onthe Tumorgrafts. Champions' website notes that its Translational OncologyServices (TOS) enable early identification of an agent's potential, biomarker discoveryand validation, enhanced agent valuations at an earlier stage and a focused,accelerated and higher-probability development path and market launch, serviceswhich Cephalon hopes will provide them with information and guidance abouttheir compounds.

"Champions' technology platform will enable us to moreeffectively select the subsets of specific human cancers most likely to respondto our novel targeted therapeutic agents and identify the underlying cancergenotypes associated with drug sensitivity and resistance tochemotherapeutics," says Vaught.

Malchi notes that the agreement is Champions' biggest TOScontract to date, and says that it provides the company with

a great foundation forstrong revenue growth for our next fiscal year."

"The potential for future milestone and royalty payments inthese contracts will allow us to capture a portion of the financial upside ourtechnology generates for our customers," Malchi adds. "We hope this is just thebeginning of a productive and long-term partnership between our companies."