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Life Sciences Roundup

Dana-Farber sues start-up over anticancer drug

Xconomy.Com / November 1, 2010

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There’s been some wrangling over a potential breakthrough lung cancer drug in US District Court in Boston. The legal battle pits Gatekeeper Pharmaceuticals, a little-known biotech firm in Millbrae, Calif., against the prominent Dana-Farber Cancer Institute in Boston and the Swiss drug giant Novartis.

At the center of the dispute is an anticancer molecule discovered by researchers at Dana-Farber — and whether Novartis or Gatekeeper should get to develop it, according to court records.

The molecule could potentially combat cases of non-small-cell lung cancer with specific gene mutations that make the deadly cancer resist Roche and OSI Pharmaceuticals’ blockbuster cancer pill erlotinib (Tarceva) and AstraZeneca’s gefitinib (Iressa), according to court documents filed by Gatekeeper. If the anticancer molecule in dispute makes it through clinical trials, it could be worth a fortune to the company that brings it to market.

Dana-Farber scientists founded Gatekeeper in March 2009 to commercialize their discovery of the potential lung cancer drug and other similar molecules, according to documents filed by Gatekeeper’s president, John Chant. Chant has served as president of the firm since its inception and led negotiations with Dana-Farber to secure an option to exclusively license the molecule in June 2009.

Gatekeeper told the cancer institute this spring that it wanted to exercise the licensing option. But Dana-Farber filed a lawsuit last month in which it asks the court to release it from its agreement with Gatekeeper. Dana-Farber’s complaint said it initially decided last year that Gatekeeper was eligible to license the drug candidate, but that Dana-Farber reviewed the matter again and concluded this August that its longtime research supporter, Novartis, has rights to license the molecule.

Gatekeeper’s board and its president have made separate filings that dispute that conclusion.

Dana-Farber’s lawsuit shines a light on the conflicts that can arise when academic groups enter into far-reaching deals with drug companies, which have become a major source of research funding for elite researchers in the Boston area and elsewhere.

Unlike government agencies, drug companies often attach strings to their research awards to academics, giving the firms the ability to acquire or license the breakthroughs made in the labs they support.

Novartis has provided research funding to Dana-Farber under a 2005 agreement that gives Novartis the option to license discoveries that emerge from the funded research, according to the cancer institute’s suit against Gatekeeper.

At issue is whether the molecules that were to be the foundation of Gatekeeper’s business are covered under the deal between Dana-Farber and Novartis.

On Oct. 15, an attorney for Gatekeeper’s board of directors filed a response to Dana-Farber’s original complaint, asking the court to recognize the start-up’s rights to the anticancer molecules. The filing also asked the court to rule that Novartis did not fund the research behind the technology.

Dana-Farber biological chemist Nathanael Gray, a Gatekeeper cofounder and director, did not reply to a phone message or an e-mail regarding this issue. Novartis spokesman Jeffrey Lockwood declined to comment on the dispute.

Xconomy also contacted Dana-Farber spokesman Bill Schaller about the court dispute, but he did not provide any comment.

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Marlborough-based drug maker Sunovion Pharmaceuticals announced that the FDA approved its once-daily oral tablet for treating schizophrenia. The drug, Latuda (lurasidone HCl), is expected to be available in the United States early next year, Sunovion said.

The drug company has six other FDA-approved drugs, including the insomnia treatment Lunesta; Omnaris, a nasal spray for treating allergy symptoms; and a number of inhalant drugs for treating asthma.

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Solx, a Sudbury-based medical-device company developing a treatment system for glaucoma, has pulled in $3.7 million of an equity offering that could total $7.2 million, an SEC filing reveals. Members of MVM Life Science Partners have seats on the Solx board of directors, according to the filing.

Solx, which launched in 2000 and worked out of the business-accelerator program at Boston University’s Photonics Center for four years, operated as a subsidiary of Canadian firm OccuLogix from 2006 to December 2007, when Solx founder Doug Adams reacquired control of the company. Solx’s products for treating glaucoma include a shunt, a laser, and a sensor.

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Cambridge-based Resolvyx Pharmaceuticals said it sold an option to the private equity firm Celtic Therapeutics to acquire its lead drug, RX-10045, and license it for all uses in treating eye conditions. The drug, a small molecule derivative of omega-3 fish oils, is scheduled to begin Phase III testing for the treatment of chronic dry eye syndrome in 2011.

Celtic, which has operations in New York City and Lausanne, Switzerland, has also purchased a note that is convertible into Resolvyx stock. The firms did not reveal financial details of the note purchase and option deal.

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InVivo Therapeutics, based in Cambridge, said it has completed a reverse merger and is conducting a $10.5 million private-placement financing in part to fund a human study of its implant to treat spinal cord injuries.

The firm did the reverse merger with an entity called InVivo Therapeutics Holdings, and it will be quoted on the OTC market under the symbol NVIV. Frank Reynolds, who founded the company with technology from the MIT lab of inventor Bob Langer in 2005, will continue to serve as CEO of the company.

This report was compiled by the editors of Xconomy, an online news website focused on the business of technology and innovation. For more New England coverage, visit www.Xconomy.com/boston.

Correction:Because of a reporting error by Xconomy, an item in Monday's Business, Science, and Innovation section about a lawsuit filed by the Dana-Farber Cancer Institute misstated the defendants in the case. The only named defendant in Dana-Farber's complaint is Gatekeeper Pharmaceuticals, a California biotechnology firm.