April 29, 2009 / 6:52 AM / 11 years ago

UPDATE 2-New cash for Oxford Bio as Sanofi redraws alliance

* Sanofi drops Trovax after clinical trial setback

* French group initiates new collaboration in eye drugs

* Payments will secure Oxford BioMedica funding into 2012

* Shares jump 24 percent

(Adds analyst’s comment, latest share price)

LONDON, April 29 (Reuters) - Oxford BioMedica Plc (OXB.L) said French drugmaker Sanofi Aventis (SASY.PA) had handed back rights to Trovax, a therapeutic cancer vaccine, to the biotech company but also started a new alliance in eye medicine.

The changed relationship brings a cash windfall and gives the small British firm sufficient funds to support its operations into 2012, boosting the value of its stock by nearly a quarter.

Oxford BioMedica will receive an immediate payment of $16.5 million relating to the Trovax decision, which follows a major pruning of Sanofi’s drug pipeline, it said on Wednesday. [ID:nLT616178]

Gary Waanders, a biotech analyst at Nomura Code Securities, said the French drugmaker’s decision to return rights to Trovax was no surprise, given the problems seen with the treatment during a Phase III clinical trial last year.

Sanofi plans a new collaboration with Oxford BioMedica to develop gene-based medicines for treatment of ocular diseases.

Oxford BioMedica will get an upfront payment of $26 million and committed funding of up to a further $24 million over three years under this new collaboration.

Shares in Oxford BioMedica were 24 percent higher at 11.5 pence by 0805 GMT. (Reporting by Ben Hirschler; Editing by Greg Mahlich)

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