Norwegian drugmaker Clavis Pharma has signed a major licensing deal for its investigational anti-cancer drug with the USA’s Clovis Oncology.

Under the terms of the agreement, Clovis will take over responsibility for development and manufacturing of CP-4126, which is in Phase II trials for pancreatic cancer and shows potential in certain other solid tumours. The drug is a lipid-conjugated form of Eli Lilly’s Gemzar (gemcitabine).

Cashwise, Clavis will receive an upfront payment of $15 million, plus potential payments totalling up to $365 million. The Oslo-based group is also eligible to get tiered double-digit royalties on sales booked by Clovis in the USA, Europe, Canada, Central and South America.

Clavis chief executive Geir Christian Melen said the agreement is an important validation of the firm’s potential “to generate multiple novel cancer drugs with enhanced performance over existing therapeutics”. CP-4126 is the firm’s second product behind elacytarabine, which is about to go into Phase III trials and is an improved form of leukaemia drug cytarabine, or cytosine arabinoside (Ara-C).

As for Clovis, which was founded this by former executives of Pharmion Corp, which in turn was acquired by Celgene in 2008 for $2.9 billion, chief executive Patrick Mahaffy said that while gemcitabine is the standard of care in pancreatic cancer, “accumulating data suggest that a significant percentage of patients may derive little benefit from its use”.

This is due to low expression of the hENT1 transporter that allows gemcitabine to enter tumour cells, he added, and in vitro data “demonstrate that CP-4126 overcomes this resistance mechanism”. Mr Mahaffy concluded that “we now have the opportunity to show that a cytotoxic, which remains the backbone of cancer therapy, can become an effective, targeted therapy in this large subset of patients”.

The deal has certainly gone down well in Norway and Clavis shares had shot up 44.8% to 47.50 Nowegian kroner by 9.10am (UK time).