Novartis has signed a $515 million deal with US firm SGX Pharmaceuticals to extend its portfolio of drugs to treat chronic myelogenous leukaemia.

SGX is developing drugs for CML patients whose disease has become resistant to other treatments, including Novartis’ own Glivec/Gleevec (imatinib), a blockbuster product which is the first-line treatment for Philadelphia chromosome-positive CML, the most common form of the cancer.

Upwards of 30% of CML patients do not achieve a clinical response to Novartis’ drug, or cannot tolerate it, and analysts have suggested that an effective second-line agent could amass sales of $500 million or more.

A number of other companies are developing drugs to target this non-responder population, including Bristol-Myers Squibb, whose dasatinib has already been filed for this indication in the USA and could be cleared before year-end.

Under the terms of the agreement, Novartis secures rights to SGX compounds that inhibit BCR-ABL, a molecular target also hit by Glivec. All the compounds are currently in preclinical development. In return, SGX will receive $25 million upfront, and $515 million in research funding, equity investments and milestone payments, as well as royalties on any eventual sales.