Bayer and Onyx Pharmaceuticals have settled their long-running battle over rights concerning regorafenib, an oral multikinase inhibitor like the two firms' big-selling liver and kidney cancer drug Nexavar.

In May 2009, Onyx sued over the rights to regorafenib, claiming it is a variant of Nexavar (sorafenib) while Bayer has always insisted that the former substance is not covered by the collaboration the companies signed way back in 1994. However, a deal has now been reached, and legal proceedings have been dropped.

Under the terms of the settlement, which recognises that regorafenib "is a Bayer compound", the German group will have "the final decision-making authority for global development and commercialisation" of the drug, while Onyx will receive a 20% royalty. Furthermore, the US biotech "will have no obligation to pay past or future development and commercialisation costs of regorafenib", and has a co-promotion option in the USA.

Regorafenib is in two Phase III studies - for the treatment of gastrointestinal tumours (for which it has fast-track status in the USA) and metastatic colorectal cancer. It is also in trials for a host of other cancers, including liver and kidney, for which Nexavar is already approved.

Nexavar agreement renegotiated

The companies also noted that Bayer will purchase Onyx’s royalty rights for sales of Nexavar in Japan in exchange for a one-time payment of $160 million. The Leverkusen-based group may also make future payments to Onyx of up to $15 million in 2012-2013 based on product pricing in Japan.

Crucially, the settlement notes that in the event of a change of control or acquisition of Onyx, the current profit-sharing, co-development and US co-promotion of Nexavar will be preserved. The company has been viewed as a takeover target by some analysts.