Onyx Pharmaceuticals Inc. said it regained full rights to the cancer therapeutic candidate ONYX-015 from Warner-Lambert Co., which is now part of Pfizer Inc., in addition to an armed therapeutic virus formerly partnered with Pfizer.

Richmond, Calif.-based Onyx first signed an agreement with Warner-Lambert in September 1999 to develop and commercialize ONYX-015, a modified adenovirus, in a deal valued at up to about $155 million. (See BioWorld Today, Oct. 19, 1999.)

In August 2001, Onyx got back some of the rights to its lead product for cancer, ONYX-15, from Pfizer. At that time, however, Pfizer still retained rights to ONYX-15 for intravenous administration. To explain the change in the deal at that time, an Onyx official said Pfizer's interests were in larger markets, such as non-small-cell lung cancer. (See BioWorld Today, Aug. 9, 2001.)

"This is completing a process that we initiated a little over a year ago," Onyx Chairman and CEO Hollings Renton told BioWorld Today. "Even after a year's time, we still had a different strategic view for the product and the platform, and we felt it was imperative to regain the rights in order to gain a partner who shares our strategic vision."

Renton noted that Onyx was able to regain those rights without any additional financial obligation to Pfizer. In fact, Renton said that the company had been receiving very little financial support from Pfizer.

The original deal called for Warner-Lambert, acquired by Pfizer in 2000, to make an up-front payment and equity investment over two years totaling $15 million and pay for $40 million of the Phase III trial of ONYX-015. Warner-Lambert also was to pay for the research and development of two additional products. Including milestones for all three products, the company could have received up to an additional $100 million.

ONYX-015 is designed to replicate in and kill cancer cells that have an abnormal p53 pathway, leaving unaffected normal cells that have functioning p53 protein, which is known to protect cells from developing into tumor cells.

But in August 2001, Onyx took back the financial responsibility for development, saying the decision to do so was its own. Under the new terms, if Onyx had gotten the drug approved by the FDA for intravenous use, the firms would have resumed the deal as originally entered in 1999. (See BioWorld Today, Aug. 9, 2001.)

Today, the ongoing Phase III trials of ONYX-015 in head and neck cancer and colorectal cancer have been stymied by a limited supply of the drug from Onyx's partner, XOMA LLC, of Berkeley, Calif., Renton said.

An update of the supply status "will be our next announcement," he said.

Another Onyx product is ONYX-411, an adenovirus that selectively replicates in and kills cancer cells based on genetic defects in the retinoblastoma tumor suppressor gene, which has shown antitumor activity in animal models.

Renton acknowledged that Onyx needs a partner now to help with cash flow.

At the end of the second quarter, Onyx reported a cash position of about $55 million, and Renton said the company's burn rate is about $11 million per quarter.

"We will certainly will be moving aggressively to identify a new partner so that we can control our burn rate," Renton said.

Earlier this month Onyx said its partner, Bayer Corp., of Pittsburgh, began a single-agent Phase II study of BAY 43-9006, a Raf kinase inhibitor, for the treatment of hepatocellular carcinoma. Onyx received a $5 million loan milestone payment as a result. The companies said additional single-agent Phase II studies are planned, and Bayer added that a Phase II study in colorectal cancer is expected to begin this quarter.

Onyx's stock (NASDAQ:ONXX) rose 18 cents Tuesday to close at $4.43.