Two years after licensing worldwide rights outside of Japan for Rigel Pharmaceuticals Inc.'s Aurora kinase inhibitors, Merck Serono SA exercised its option to complete the package by picking up Japanese rights, triggering a $3 million payment to Rigel.

Shares of South San Francisco-based Rigel (NASDAQ:RIGL) fell 54 cents, or 6 percent, to close at $8.51 on Wednesday. The company could not be reached for comment.

The original deal, signed in October 2005, called for Serono to pay Rigel $10 million in cash, $15 million in equity, and up to $135 million in milestones in exchange for exclusive development and commercialization rights to the program. Although the deal initially excluded Japan, Serono had two years to exercise an option in that territory. (See BioWorld Today, Oct. 26, 2005.)

Serono is conducting three Phase I cancer trials with R763/AS703569, the lead drug in the program. Jefferies and Co. analyst Adam Walsh predicted that interim data from a single-agent leukemia trial will be available by the end of the year, with full results to follow in 2008. Also expected in 2008 are data from a Phase I trial combining R763 with gemcitabine (Gemzar, Eli Lilly and Co.) chemotherapy in advanced tumors and data from a Phase I trial combining R763 with the standard of care in advanced tumors.

In preclinical studies, R763 showed anti-tumor activity. The drug is designed to inhibit Aurora kinases A and B, elevated levels of which are often associated with cancer. Inhibiting these kinases is thought to disrupt cell division and promote cell death through apoptosis, making them a hot oncology target.

The most advanced Aurora kinase inhibitor in development is Vertex Pharmaceuticals Inc.'s MK-0457 (VX-680), which is partnered with Merck & Co. Inc., of Whitehouse Station, N.J. The drug, which inhibits several kinases in addition to Aurora, is in a pivotal Phase II trial for chronic myelogenous leukemia and acute lymphocytic leukemia patients with the T3151 BCR-ABL mutation.

Behind MK-0457 are several Phase I Aurora kinase inhibitors, including Millennium Pharmaceuticals Inc.'s MLN8237, Cyclacel Pharmaceuticals Inc.'s CYC116, and Sunesis Pharmaceuticals Inc.'s SNS-314. Companies with preclinical programs include Ambit Biosciences Corp., Telik Inc. and EntreMed Inc.

Aurora is not the only kinase Rigel is interested in, however. The company's internal drug discovery engine has generated a pipeline of kinase inhibitors and has resulted in discovery deals with the likes of Janssen Pharmaceutica NV, Novartis Pharma AG, Daiichi Pharmaceuticals Co. Ltd., and Merck & Co. Inc.

The lead product in Rigel's pipeline, Syk kinase inhibitor R788 (gamatinib fosdium), recently completed a Phase II trial in immune thrombocytopenic purpura. Results showed that nine of the first 14 patients (64 percent) had higher stabilized platelet counts, with the primary side effects being gastrointestinal. R788 is also being studied in a Phase I/IIb cell lymphoma trial, and data from a Phase II rheumatoid arthritis trial are expected before the end of the year.

R788 is unpartnered, as is the preclinical JAK3 kinase inhibitor R348, which is scheduled to begin clinical trials later this year or early next year. In a research report, Walsh called R348 "low-hanging fruit for a potentially large partnership deal."

Rigel is also conducting preclinical work on a number of other kinase inhibitors and an ubiquitin ligase program for HIV.