J&J signs potential $500 mln drug deal with Astex

LONDON Mon Jun 9, 2008 7:19am EDT

LONDON (Reuters) - Britain's Astex Therapeutics has signed a cancer drug research deal with Johnson & Johnson (JNJ.N) potentially worth more than $500 million in milestone payments, it said on Monday.

The privately owned biotech company will receive upfront payments, cash and equity payments and research funding of $37.4 million over two years under the agreement.

The deal grants a worldwide licence to J&J's Janssen unit to develop and commercialize compounds arising from Astex's FGFR inhibitor program and establishes a novel drug discovery program focused on two further cancer drug targets.

Fibroblast Growth Factor Receptor, or FGFR, activates a biochemical pathway that promotes cell growth and is thought to play a role in multiple myeloma, breast, prostate, colon and bladder cancers.

Total payments, excluding royalties, would be worth over $500 million to Astex, assuming one product from each program is successfully commercialized in all territories, Astex said.

The deal is a further vindication of the Cambridge-based company's fragment-based drug discovery platform, known as Pyramid.

Astex already has existing alliances with other major drugmakers, including Novartis AG (NOVN.VX), AstraZeneca Plc (AZN.L), Bayer AG BAYG.DE and Boehringer Ingelheim.

Astex was established in 1999 and has raised more than 70 million pounds ($138.4 million) in external finance. Its investors include Abingworth Management, Advent International, Alta Partners, Apax, Bayer, GIMV, HypoVereinsbank, Novartis, Oxford Bioscience Partners and the University of Cambridge.

(Reporting by Ben Hirschler; editing by Sue Thomas)

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