Schering-Plough will out-license U.S. rights to the Phase III quinolone antibiotic garenoxacin due to potential conflicts of interest related to the company's primary care marketing agreement with Bayer.

"We cannot continue with garenoxacin in the U.S. now that we have the Bayer alliance," Global Pharmaceuticals President Carrie Cox said on Schering's first quarter earnings call April 21.

"We are looking at ways to maximize the potential of garenoxacin through potential licensing or other arrangements with other U.S. partners," she said. "We continue to consider if we will be able to keep the product ourselves on an ex-U.S. basis."

"We still believe in this product. We still think it has very good potential. We're just looking at ways to bring the full franchise together and yet meet all the partnering obligations."

Schering acquired U.S. marketing rights for Bayer's primary care products, including the antibiotics Avelox (moxifloxacin) and Cipro (ciprofloxacin), in 2004. The deal also includes the erectile dysfunction therapy Levitra (vardenafil) (¹ Also see "Schering-Plough Adds Levitra To Product Portfolio Through Deal With Bayer" - Pink Sheet, 13 September, 2004.).

At the time, Schering acknowledged it may need to sublicense U.S. rights to garenoxacin as a condition of the Bayer agreement.

Garenoxacin would compete with Avelox, another quinolone antibiotic, the firm said. Cipro generics are already on the market.

Schering licensed garenoxacin from the Japanese firm Toyama in 2004 for an upfront payment of $80 mil. (² Also see "Schering-Plough Licensing Toyama Antibiotic Garenoxacin, Picking Up Where Bristol Left Off" - Pink Sheet, 31 March, 2004.). Toyama is entitled to milestone payments of up to $245 mil. under the current licensing deal.

Should another company license garenoxacin for the U.S. market, it would be the third firm to work on the product. Garenoxacin had previously been licensed to Bristol-Myers Squibb, which returned rights to the drug to Toyama in 2003.

- Kate Rawson

Phase III Antibiotic Garenoxacin Will Be Out-Licensed, Schering Says

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