Shares in German biotechnology company GPC Biotech were up nearly 13% in mid-morning trading today after the company signed a co-marketing deal with US drugmaker Pharmion for its satraplatin cancer drug.
The deal, which has a total value in excess of $300 million dollars, is a prime example of the value for smaller companies in holding onto the rights to their products until the later stages of development.
GPC Biotech said will receive an upfront payment of $37 million in return for handing Pharmion the commercial rights to satraplatin to treat prostate cancer in Europe, Turkey, the Middle East, Australia and New Zealand. Pharmion said it expects to file for European marketing approval in 2007.
The deal could also bring in a further $270 million in regulatory and milestone payments, according to GPC. And the German biotech will also receive royalties on sales of satraplatin in Pharmion's territories at rates of 26%-30% on annual sales up to $500 million, and 34% on annual sales over $500 million.
Earlier this month, GPC started a rolling submission in the USA for satraplatin, its lead drug, as a second-line treatment in combination with prednisone for patients with hormone-refractory prostate cancer.
Satraplatin is an orally-active platinum-containing cancer drug that has been recommended for 'fast-track' review in the USA. Worldwide sales of platinum cancer drugs exceeded $2.2 billion in 2004, and it is estimated that satraplatin itself could achieve revenues of 500 million euros at peak.