Dispute on cancer drug: US licenser bugs German biotech company
GPC Biotech is well on the way to earning hundreds of millions of dollars with a new cancer drug. However, a letter from America has challenged everything; the small biotech company has to resist drastic claims "made in bad faith, [being] completely baseless and without merit".
(Dec 18th 2006)
Don't halloo until you are out of the wood, goes an old American proverb. In this context, an euphoric statement concerning a novel drug, made several weeks ago by GPC Biotech's Chief Executive Officer, Bernd Seizinger, suddenly sounds like over-hasty jubilation. So what has turned his contentment to contempt?
The licence to develop ...
GPC Biotech from Martinsried, Germany, discovers and develops anti-cancer drugs. The company's lead product candidate, satraplatin (applied as a second-line chemotherapy treatment in hormone-refractory prostate cancer) is only meters away from successful approval. Satraplatin is a member of the platinum family of compounds which are used in chemotherapy treatments to treat a wide variety of cancers. Unlike the platinum drugs currently available, all of which require intravenous administration, satraplatin is applied orally (as capsules). Its market potential is high; GPC says it could earn about US$500 million per annum.
Satraplatin is not an original GPC drug. In 2002, the US company Spectrum Pharmaceuticals (from Irvine, California) sold a licence on its investigational drug to the German company. GPC performed a finally successful phase III trial with satraplatin since then and hopes for an early approval in the USA (by the end of 2006) and Europe (in the first half of 2007). Satraplatin will be marketed and sold in the USA by GPC Biotech itself and in Europe by partner Pharmion (a US company), who was granted exclusive commercialisation rights to satraplatin for this region. In addition, satraplatin is designated for further oncology development programmes and trials, evaluating the compound in combination with radiation therapy, with other cancer therapies and in various other cancers.
... is threatened following a letter from the USA
"We are delighted that the vision we shared with Spectrum Pharmaceuticals for satraplatin at the time we licenced the compound is now becoming tangible", said GPC's Chief Executive Officer Bernd Seizinger on Sept 24th 2006. That's bad luck! His euphoric vision seems about to be completely shattered.
On December 12, 2006, satraplatin licenser Spectrum Pharmaceuticals stabbed its "partner" GPC in the back and surprised the Germans with a premature Christmas present. The US company filed a "Demand for Arbitration and Statement of Claim with the American Arbitration Association to resolve a dispute under the co-development and licence agreement for satraplatin" (in other words: the Americans want to make more capital on satraplatin).
GPC Biotech's CEO Bernd Seizinger rejected the attack stating "Spectrum's claims [were] made in bad faith, [were] inconsistent with the licence agreement, and [were] completely baseless and without merit".
In its arbitration claim, Spectrum demands further payment of € 9.0 million from GPC. According to GPC, this claim is in connection with an US$18 million reimbursement for past development expenses, an US$19 million payment for ongoing and future development costs and an additional US$22 million commitment for future development-related expenses from co-development and licence partner Pharmion. In addition, Spectrum alleges, together with two other claims, that GPC "has not used commercially reasonable efforts to obtain regulatory approval and to promote the distribution of satraplatin in Japan".
The bothersome lawsuit ...
As expected, GPC Biotech will countervail Spectrum's action, "We will vigorously defend ourselves against these allegations and seek every remedy available to us under the law", stated Bernd R. Seizinger, Chief Executive Officer of GPC Biotech, as a first reply to Spectrum. Thus everything is indicating a long lasting and tedious lawsuit - with no winners in the end.
... could evolve into a life-threatening worst case scenario for GPC
One thing that should indeed be of great concern to Seizinger is not the € 9.0 million claim, of course, but the fact that the dispute could endanger GPC's rights to satraplatin if Spectrum Pharmaceuticals fairs well with its lawsuit. The US company is seeking a declaration that GPC Biotech's alleged breach provides a basis to terminate the co-development and licence agreement between the two companies.
The latter would be the worst case scenario for GPC. Without its potential blockbuster satraplatin, the company would revert to the status of an unimportant start-up. You can bet your life that in Martinsried the alarm bells are resounding.
Winfried Koeppelle
