Sanofi-Aventis has signed a pact with Taiho for a novel cancer compound dubbed S-1, which has been available in its domestic market since 1999, and could bring the Japanese firm some $360 million.

An oral agent, S-1 - a pro-drug of 5-fluorouracil combined with two enzyme inhibitors designed to boost drug levels whilst improving gastrointestinal toxicity - is currently marketed for use in a number of indications, including gastric cancer, non-small cell lung cancer and breast cancer.

And Sanofi-Aventis will be hoping to improve on the relative success Taiho has already demonstrated in its domestic market, with sales of 31 billion yen ($270 million) in 2005. S-1 is currently in late-stage development in Europe, the USA and other countries.

Under the terms of the deal, Sanofi-Aventis could pay upfront and milestone fees of $360 million, as well as royalties on sales, in return for exclusive marketing rights to S-1 outside of Japan and Asia.