A week after closing a $26.6 million Series A financing to acquire Toll-like receptor (TLR) assets, VentiRx Pharmaceuticals Inc. licensed a preclinical TLR program from Array BioPharma Inc. (See BioWorld Today, Mar. 6, 2007.)

In exchange for granting an exclusive, worldwide license to the program, Array will receive an upfront fee, milestone payments, royalties and an equity stake in VentiRx.

Although specific terms were not disclosed, David Snitman, chief operating officer of Boulder, Colo.-based Array, told BioWorld Today the royalty is "high single digit" and the milestone payments are "back-end loaded" and include some commercialization milestones.

But the most important aspect of the deal, according to Snitman, is Array's option to acquire a 50 percent ownership position in all oncology drugs developed through the TLR program.

"In this day and age, we realize we can't develop all of the preclinical assets we have," Snitman said. He added that the arrangement takes advantage of VentiRx's TLR expertise while allowing Array to "keep the upside." The decision of whether or not to opt-in on each product will be made "around Phase III," Snitman said.

TLRs have been the subject of several licensing deals in the past two years, with three deals valued at about half a million dollars. Snitman confirmed that Array received interest in its program from "many different companies," but he said he settled on VentiRx because of the team's experience and the opportunity to "gain value from more than just a royalty."

Given the highly competitive TLR landscape, San Diego-based VentiRx declined to reveal many details of its newly-licensed portfolio, including exactly which TLRs the compounds target. However, executive vice president and chief business officer Michael Kamdar told BioWorld Today that the license is for "a number of small molecule product candidates, some more advanced than others," including both agonists and antagonists.

VentiRx expects to advance candidates for the treatment of oncology and allergy into the clinic in 2008. The company hasn't made any "firm decisions" regarding additional indications, according to Kamdar, but he noted that TLR agonists could be useful in infectious disease and as adjuvants, while TLR antagonists may be applicable in the autoimmune disease field.

In the treatment of cancer, said Robert Hershberg, executive vice president and chief medical officer, VentiRx plans to differentiate itself and navigate around failures in the space by "not looking at TLRs as a stand-alone treatment, but rather in combination with a variety of different agents." He added that he sees opportunity for combination strategies "well beyond chemotherapy."

In allergy, Hershberg said, the company will pursue a "fundamental change" in the way allergies are treated, taking an approach that is "independent of specific allergens."

Array expects additional preclinical license deals to follow the TLR program, but Snitman emphasized that the company will continue to develop many of its own programs internally to achieve its goal of filing two investigational new drug applications each year for the next several years. Out-licensed programs will likely be those that require outside expertise, and decisions will be made based on "complexity, not quality," Snitman said.

Such licensing deals will allow Array to focus on its existing clinical programs, including lead product ARRY-886 (AZD6244), a MEK inhibitor for cancer. Partner AstraZeneca plc is conducting four Phase II trials in malignant melanoma and pancreatic, colorectal and non-small cell lung cancers, and data are anticipated in time for the 2008 American Society of Clinical Oncology annual meeting.

Array also has several unpartnered programs, including ARRY-543, an ErbB-2/EGFR inhibitor completing Phase I dose-escalation studies for cancer; ARRY-162, a MEK inhibitor in multiple Phase I trials for inflammation; ARRY-797, a p38 inhibitor in Phase I for cancer and inflammation; and ARRY-520, a KSP inhibitor due to enter Phase I in the next few weeks for cancer. Both ARRY-543 and ARRY-162 will begin Phase II trials this year. Two additional compounds are expected to reach the IND phase before the end of the year, and two more are on track for 2008.

Yet Array doesn't necessarily plan to hold onto worldwide rights for all its clinical compounds. According to Snitman, the company "will do a deal for one or more clinical candidates" in 2007.

"We've had lots of interest, but there's no sense of urgency - we're just looking for the best fit," he said.