Alfacell Corp. licensed U.S. commercialization rights for the Phase III cancer drug Onconase (ranpirnase) to Strativa Pharmaceuticals in a deal worth up to $225 million.

Just $5 million will change hands up front, but both Alfacell and Strativa stand to gain much more if their gamble in choosing each other as partners pays off. Specifically, Alfacell could get $30 million for FDA approval of Onconase in unresectable malignant mesothelioma (UMM) and up to $190 million for milestones tied to Onconase sales as well as development and commercialization of the drug in additional indications. Alfacell also would receive double-digit royalties and retains a co-promotion option.

For Alfacell, the gamble lies in choosing Strativa, the recently-launched specialty pharmaceutical division of Par Pharmaceutical Cos. Inc. So far, Strativa markets just one product: Megace ES for anorexia, cachexia and unexplained weight loss in HIV patients. Although the company has deals in place for three additional late-stage products, all three are for HIV or cancer supportive care, and Onconase would be Strativa's first true oncology therapeutic.

Lawrence Kenyon, executive vice president and chief financial officer for Alfacell, told BioWorld Today that Onconase has been the subject of "bids from multiple companies for a number of years." Strativa was selected because it had the hunger of a start-up looking to build an oncology business focused on niche products, combined with the resources and infrastructure of Par Pharmaceuticals, he said.

For Strativa, the gamble lies in Onconase's somewhat checkered development history. The drug, a natural ribonuclease isolated from frog eggs, failed a Phase III trial in pancreatic cancer and its first Phase III trial in UMM.

In the pancreatic cancer trial, a preliminary analysis showed that Onconase plus tamoxifen failed to improve survival compared to 5-fluorouracil. Kenyon said part of the problem was an inability to recruit sufficiently healthy patients into the trial, and the pancreatic cancer program subsequently was discontinued. (See BioWorld Today, July 16, 1998.)

The first Phase III UMM trial compared Onconase as a monotherapy to doxorubicin. Again, there was no survival difference in the overall population, but Kenyon said a retrospective analysis showed that the sickest patients had been disproportionately weighted to the Onconase group. Backing them out of the analysis resulted in a two-month survival difference.

Onconase is now being studied in a Phase IIIb trial designed to confirm the positive data seen in the Phase III subset analysis. The trial, which was designed in coordination with the FDA, compares Onconase plus doxorubicin to doxorubicin alone in the less-severe groups of UMM patients. Enrollment of 428 patients is complete, and Kenyon said the company is "very close" to obtaining the number of clinical events needed to analyze the data.

Under the deal with Strativa, Alfacell will continue to fund development, manufacturing and regulatory work with Onconase, including the ongoing Phase IIIb trial. Strativa will fund U.S. commercialization.

Previous deals with US Pharmacia affiliate USP Pharma Spolka Z.O.O. and Genesis Pharma SA cover Onconase commercialization in Eastern Europe and certain Southeast European countries, respectively.

As of Oct. 31, Alfacell reported $5.4 million in cash and equivalents, most of which was earmarked to support the Onconase trial and new drug application filing. Once the filing is submitted, Alfacell intends to work with Strativa on additional indications for Onconase, including the possibility of moving a non-small-cell lung cancer program into Phase II.

Kenyon said the money from Strativa also will allow Alfacell to "ramp up" its preclinical work on AC 03-636 for glioma and antiviral indications, AC CJ-001 for glioma, and AC CJ-002 for non-Hodgkin's lymphoma.

Shares of Somerset, N.J.-based Alfacell (NASDAQ:ACEL) rose 25 cents, or 14.3 percent, to close at $2 on Tuesday. Meanwhile, shares of Woodcliff Lake, N.J.-based Par Pharmaceuticals (NYSE:PRX) rose 52 cents to close at $21.49.