Schering-Plough will license Toyama's quinolone antibiotic garenoxacin for an upfront payment of $80 mil. as it attempts to offset its lean intermediate-term pipeline.

Schering expects the deal to be finalized in the second quarter of 2004; the companies announced the signing of a letter of intent regarding the drug March 31.

Upon signing of a definitive agreement, Schering will receive exclusive worldwide rights to oral and intravenous garenoxacin (T-3811), excluding Japan, Korea, and China.

Toyama could also receive milestone payments totaling up to $245 mil., primarily for achievement of certain sales levels for garenoxacin.

The price tag reflects the antibiotic's advanced stage of development. Garenoxacin had previously been licensed by Bristol-Myers Squibb, which completed a broad Phase III program including trials in respiratory, skin and skin structure, and abdominal infections, including complicated intra-abdominal infections.

Bristol returned rights to garenoxacin, which it called BMS-284756, to Toyama on October 16, 2003. The license termination was "based on analyses of target product profile following completion of the clinical development program and re-evaluation of its antibacterial R&D priorities," Bristol explained.

Schering expects to begin work on a regulatory submission as quickly as is practicable after the deal is concluded.

Garenoxacin has "a different structure [than] conventional quinolones" and "exhibits a superior safety profile and antibacterial activity compared with existing drugs," Toyama's 2003 annual report maintains.

Published studies of the antibiotic, a des-6-fluoroquinolone, highlight its potency against Gram-positive organisms, including penicillin-resistant S. pneumoniae, which are increasingly resistant to older quinolones. Garenoxacin is also active against Gram-negative pathogens and anaerobic organisms.

Schering and Toyama will emphasize the drug's "favorable side effect profile," an attribute Bristol sought to define in Phase III. Bristol reported that dose-related QTc prolongation and hepatotoxicity events were not seen in the pivotal trials, and central nervous system toxicity was seen in less than 2% of patients in Phase II.

Garenoxacin is one of the first deals to come out of Schering's plans to diversify its base portfolio - the company's strategy includes filling its acknowledged intermediate-term pipeline gap through partnerships and in-licensing.

Schering is building an anti-infectives portfolio that will also feature its Phase III serious fungal infections treatment Noxafil (posaconazole), its hepatitis C franchise, and its CCR5 antagonist for HIV, which is expected to enter Phase II in 2004.

- Bridget Silverman

Schering-Plough Licensing Toyama Antibiotic Garenoxacin, Picking Up Where Bristol Left Off

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