BioWorld International Correspondent

LONDON - CeNeS Pharmaceuticals plc reached agreement with Elan Corporation plc on the unraveling of their joint venture, set up in June 2001 to develop M6G, a metabolite of morphine. That leaves CeNeS to go it alone with the Phase III trials of M6G in the treatment of postoperative pain.

Neil Clark, chief operating officer, told BioWorld International, "We are pleased to unbundle the joint venture, and are now ready to move the compound forward." Earlier this year CeNeS sold three pharmaceutical products it acquired in September 2000, for £9 million (US$14.2 million), to fund the Phase III development of M6G.

Cambridge-based CeNeS will get back all rights to M6G. In return it will pay Elan, of Dublin, Ireland, an unspecified percentage of all future sales. "This is a low royalty rate and there is no licensing of any Elan technology," Clark said.

Elan is retaining its current holding of 16.9 million CeNeS shares, equivalent to 9.9 percent of the company. No more funding will be available to CeNeS under the convertible loan stock arrangements made between the companies, under which CeNeS has drawn down $14.2 million to date. CeNeS retains the option to repay the loan or convert it into shares. That could result in Elan owning up to 36.9 percent of CeNeS by 2009.

CeNeS is looking for a new partner for M6G, which has the same pain-killing effect as morphine, but with fewer side effects. Clark said, "With the funding we now have behind us, we can deal from a position of relative strength."