A leading compound in one of the hottest areas of drug development is at the center of a dispute between Medivation Inc. and the University of California Los Angeles.

Medivation developed the prostate cancer drug MDV3100, which was recently given the generic name enzalutamide, in collaboration with the university. The San Francisco-based company claims in a breach of contract suit that UCLA researchers kept secret two nearly identical compounds and developed them using the same screening technology. The Regents of the University of California licensed these compounds – A51 and A52 (renamed ARN-509) – to a company the UCLA researchers founded, Aragon Pharmaceuticals Inc.

Medivation contends that it holds rights to all related molecules developed under a licensing agreement and a research agreement with the UC Regents, the governing board of the university. The Regents contend that these 2005 contracts gave Medivation rights only to MDV3100.

In a May 8 call on its first quarter financial results Medivation noted that it plans to file an NDA for enzalutamide in post-chemotherapy prostate cancer patients in the second quarter of 2012 and to launch the drug later this year with its partner Astellas Pharma Inc.

While contract disputes between industry and academia are not uncommon, this one stands out because of the importance of MDV3100 for Medivation. The compound has the potential to unseat Johnson & Johnson’s Zytiga (abiraterone) as the leader in this lucrative market given its strong survival benefit and the fact it does not need to be taken with a steroid Also see "Medivation Aims To Capture Prostate Cancer Market, One Trial At A Time" - Pink Sheet, 14 November, 2011..

The conflict also underscores the difficulties in crafting licensing deals and the problems that can arise when the parties interpret the terms differently.

UCLA Lab Developed First And Second Drug In One Class

The complaint, Medivation v. The Regents of the University of California, grabbed the attention of the sell-side research firm Sanford C. Bernstein, which issued a 15-page report on the litigation in March. Bernstein says that based on its analysis of court documents and agreements there appears to be a material degree of similarity between the methods used to develop MDV3100 and ARN-509, the compound Aragon is pursuing. That compound is in the Phase II portion of a Phase I/II clinical trial.

“I can’t remember a case like this where the same academic lab has an interest in both the first and second drug in the class,” Bernstein analyst Geoffrey Porges said. “The conflicts of interest here are fairly rampant.”

In an interview, Bernstein analyst Geoffrey Porges noted that licensing disputes between academia and licensee developers regularly take place behind the scenes. “I can’t remember a case like this where the same academic lab has an interest in both the first and second drug in the class,” he said. “The conflicts of interest here are fairly rampant.”

Porges said the case is very significant and could put a damper on industry and academic collaborations if the outcome goes against Medivation.

“If academia can keep babies off to one side and start a company, it will deter industry-sponsored research,” he said. “For the sake of academia, you might want the case to go against UCLA.”

Kathleen Denis, associate VP of technology transfer at The Rockefeller University, said the outcome of the case depends on what the contract says. She was not familiar with the Medivation complaint but speaking generally, she said “universities are pretty loath to give someone everything that exists now or in the future.”

“We try pretty hard to explain you are buying a few snippets from the movie that is showing, not the whole movie,” Denis said of discussions with licensees.

Despite such precautions, disputes often arise between industry and academia over patents and contracts. Denis said virtually every university has litigated many times.

Did Collaboration Cover All Prostate Cancer Compounds?

Medivation filed suit against the Regents of the University of California in May 2011 in San Francisco Superior Court. In its second amended complaint, filed Feb. 9, the company says the Regents approached it in 2005 and suggested a collaboration to develop the best prostate cancer compound using a novel screening method developed by former UCLA researcher Charles Sawyers. The technology identifies molecules that could treat late-stage prostate cancer resistant to hormone therapy treatment.

The complaint says the collaboration involved the development of nearly 180 different compounds using the screening method and Medivation selected MDV3100 for commercialization. The suit says Medivation licensed molecules that already existed at the time the collaboration began and agreed to fund additional research using Sawyers’ screening method, in exchange for the right to license promising molecules developed in the research.

The suit asserts that Sawyers and UCLA researcher Michael Jung, “secretly concealed two molecules – in the same class as the ones disclosed and licensed to Medivation, and developed using the same screening method – and launched Aragon to compete with Medivation.”

Medivation claims the molecules, A51 and A52, were developed with information Medivation generated on MDV3100. The UC Regents licensed A52, renamed ARN-509, and A51 to Aragon in May 2009.

The Regents says it did not grant Medivation any rights to the A51 and A52 compounds.

“Rather than signing over all ideas generated through its faculty member’s work to one company, the Regents license inventions in a manner that will ensure broad development and dissemination of these treatments to the public,” UCLA spokesperson Steve Ritea said.

In a court filing, the Regents said it has always made it clear to its licensees, including Medivation, that it would continue to develop competing compounds. The filing states that at the time of contracting with Medivation, Jung and his colleagues were investigating several different compounds and did not believe the A-series compounds had any potential until after the agreements with Medivation were executed.

Aragon intervened in the case filing a complaint against Medivation in August 2011. It seeks a declaration that its exclusive license agreement with the Regents is valid and that it therefore has exclusive rights to develop and commercialize A51, A52 and ARN-509. Medivation added Aragon to its suit against the Regents in its second amended complaint.

UCLA Could Face Suit From Aragon Investors If It Loses Case, Analyst Says

In November, Medivation released interim data from the AFFIRM study, a pivotal Phase III MDV3100 trial in the latest stage prostate cancer patients who had failed docetaxel-based chemotherapy. The independent data monitoring committee halted the study early after it showed MDV3100 prolonged survival by 4.8 months compared to placebo and reduced the risk of death in men with metastatic castration-resistant prostate cancer by 37%. Final data confirming the overall survival benefits was presented at the American Society of Clinical Oncology Genitourinary Cancers Symposium in February.

The results beat the overall survival benefit of J&J’s Zytiga, launched in April 2011, by nearly a month. MDV3100 has an additional edge in that unlike Zytiga, it does not have to be taken with prednisone.

Bernstein’s report notes that UCLA scientists developed ARN-509 to be a “better” version of MDV3100, one which can be delivered at a higher dose and thus may lead to a better response in prostate cancer patients.

“From the outside, with the two drugs invented by the same scientists, in the same laboratory, at the same period in time, and with Medivation providing $13 million in funding to the laboratory, we believe the circumstances create the appearance of duplicity on UCLA’s part,” the report states.

Bernstein’s Porges believes the best course for the parties is to reach a settlement. He said the university has the most to lose since Aragon investors could bring a countersuit against UCLA if the courts award Medivation the rights to ARN-509 rights.

In his report Porges states that under a three-way settlement, the rights to ARN-509 could be transferred to Medivation with Medivation making a single one-time payment to UCLA which would then pay most or all of this to Aragon’s shareholders.

“This would give Medivation a lead compound in the class whose development is largely funded by Astellas, and then a back-up compound fully owned by Medivation,” the report says. “Aragon’s investors could claim a positive risk-adjusted return on their investment from the one-time payment, perhaps with some retained royalty or equity interest in Medivation, and UCLA could avoid having to pay substantial independent penalties that could otherwise be in the tens of millions of dollars, as well as retaining some participation in the royalty stream for both drugs.”

Medivation To Provide 50% Of Enzalutamide Sales Force

Whether or not the case settles, the near-term future for Medivation looks positive. Bernstein forecasts that MDV3100 will come to market in the first quarter of 2013 and generate approximately $1 billion in revenue worldwide by 2015.

The drug’s debut may be sooner. Medivation President and CEO David Hung said in the company’s first quarter call with analysts that it has completed a pre-NDA meeting with FDA and plans to file an NDA with Astellas in the second quarter of 2012 with a request for priority review. Medivation teamed up with Astellas to co-develop and commercialize MDV3100 in October 2009.

Hung said Medivation and Astellas will co-promote the drug in the U.S. market and Medivation will provide 50% of the sales and medical affairs field forces. Asked how many sales reps the company would be hiring, Cheryl Cohen, chief commercial officer, said Medivation has not disclosed the figure for competitive reasons.

An analyst asked how Medivation would price enzalutamide compared to Zytiga and Abbott Laboratories Inc.’s Lupron (leuprolide).

“We’re not really giving guidance on our pricing at this point, but of course we’re taking into consideration the competitive pricing,” Cohen replied. “We’re also taking into consideration the three important key stakeholders, which are the patients, the payers and of course the physicians, because it all impacts our pricing decision.”

J&J has successfully launched Zytiga, which costs $5,000 a month, or approximately $40,000 for a median eight-month treatment duration. Payers are covering it with relatively few restrictions and medical oncologists are using it in advanced patients Also see "J&J’s Zytiga –The Anatomy Of A Cancer Launch" - In Vivo, 30 November, 2011..

Medivation’s Pipeline Beyond Enzalutamide Seems Empty

Enzalutamide is Medivation’s sole product. The company had been developing Dimebon (latrepirdine) for Alzheimer’s disease and Huntington disease under a collaboration agreement with Pfizer Inc. But after negative results in two Phase III trials, Pfizer terminated the agreement in January and the two discontinued development of the compound Also see "Pfizer/Medivation End Dimebon Development Following Another Failed Alzheimer’s Trial" - Pink Sheet, 17 January, 2012..

Medivation is developing MDV3100 for use in other stages of prostate cancer and for breast cancer. The company is enrolling patients in a Phase III PREVAIL trial of enzalutamide in men with advanced prostate cancer who have not yet received chemotherapy and a Phase II TERRAIN trial comparing the effect of enzalutamide versus bicalutamide, the most commonly used anti-androgen, on progression-free survival in men with advanced prostate cancer who have progressed following medical castration with LHRH analog therapy or surgical castration. And it has completed enrollment in a Phase II open label study of hormone-naïve patients.

In addition, the company has begun to enroll breast cancer patients who have failed prior hormonal therapy in an open-label Phase I study.

Medivation Battles UCLA Over Rights To Prostate Cancer Compound

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