November 7, 2006 Licensing fee gives San Diego biotech big cash infusion By Penni Crabtree Union-Tribune Staff Writer Ambit Biosciences said yesterday that it has signed a drug discovery and development deal worth up to $250 million with Cephalon, a Pennsylvania-based biotechnology company. Most of the potential value of the deal for the privately held San Diego biotech is in the future, hinging on certain milestones being reached and two drug candidates ultimately making it to market ñ a rare feat for most biotechs Cephalon, with several approved drugs to its credit and revenues of $1.2 billion last year, is no development slouch. The deal provides Ambit with a partner experienced in bringing drugs to market and with an $18 million cash infusion in the form of a licensing fee. Cephalon is best known for its drug Provigil, a treatment for narcolepsy and work-related excessive sleepiness problems, as well as the pain treatment Actiq. Ambit chief executive Scott Salka said the deal provides validation for the biotech's proprietary drug screening technology and services, which it has leveraged in other revenue-generating collaborations with the likes of Roche, Bristol-Myers Squibb Co. and Pfizer. The $18 million will be used in part to fund development of Ambit's lead internal drug candidate, AC220, a potential treatment for leukemia. An initial Phase 1 study is expected to be launched by the end of this year. ìWe never claimed to be the smartest people on the planet, but we have a very talented, proficient group of scientists armed with a powerful, productive technology,î Salka said. ìPut those two things together and you have a very efficient engine for bringing drug compounds into the clinic.î Ambit was formed in 2000 as a so-called research ìtoolî company, developing a technology called KinomeScan to screen potential drug molecules against kinases, which are enzymes that modify other proteins and are crucial in regulating cell growth and death. When kinase activity goes wrong, it can lead to various diseases, particularly cancer. Several top-selling drugs designed to inhibit specific kinases, including the drug Gleevec, have been developed in recent years. As part of the Cephalon collaboration, Ambit will screen a large library of kinase-focused compounds obtained from Cephalon, and detail how thousands of the drug-like chemical structures interact with kinase disease targets. ìAmbit's technology will allow us to identify the best compounds for further research and to continue improving those we select,î said Jeffrey Vaught, executive vice president of research and development at Cephalon, in a written statement. Late last year, Ambit expanded an existing kinase profiling collaboration with Bristol-Myers Squibb. In return for five years of KinomeScan services, Ambit received upfront fees, a $5 million equity investment, and an exclusive license to product candidates from Bristol's solid tumor kinase inhibitor research program. Money-losing Ambit, which employs 75, has raised about $56 million in venture capital funding. The Cephalon deal and other revenue-generating collaborations should fund the biotech through next year and possibly 2008, Salka said. News Main Menu