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ONT-10 over the original. Merck KGaA pays the expenses and makes the decisions on development of Stimuvax, leaving Oncothyreon with what Kirkman says is a “mid-teens” percentage royalty on sales if the drug reaches the market in North America, and a “very high-single digit” royalty in other parts of the world. But with ONT-10, Oncothyreon still owns 100 percent of the commercial rights to the product, and doesn’t owe anybody a royalty for the adjuvant component, which it developed internally. Merck KGaA has the “right of first negotiation” to co-develop ONT-10 with Oncothyreon, but Kirkman says that leaves him a lot of options. It’s possible that Oncothyreon could develop the second-generation product on its own, or choose another partner besides Merck KGaA for co-development if it can get better terms, he says.
Like most things in biotech, it will take a long time to get satisfying answers about how good both cancer vaccines really are. Investors sold off Oncothyreon shares in March when the company said it would take until 2013 to get the final results from the ongoing Phase III trial of Stimuvax in lung cancer patients, known as Start. And Oncothyreon’s first trial of ONT-10 is still quite preliminary—a Phase I safety study that will assess people’s immune reactions to the product in a variety of doses. That small study should yield data in 2013, Kirkman says.
Oncothyreon has seen a big surge in the number of shares held in a short position—essentially a case where investors bet that the stock will fall—so there are certainly plenty of people who doubt Stimuvax and the company’s pipeline. And Kirkman bristled about the market reaction to the Stimuvax news from March, in which Merck KGaA said it will need more follow-up time before it can hope to show a benefit.
But when we spoke—just days before Oncothyreon pulled the trigger on a $54 million underwritten stock offering—Kirkman said there are people on Wall Street who fairly recognize the potential of not just Stimuvax, but the second-generation product, too. And the money they’ve provided will certainly help push forward this program in clinical trials, after it spent a couple of recession years on the corporate back burner.
Those days are now behind the company. While Seattle-based Dendreon has helped popularize the concept of cancer vaccines on Wall Street, and Bristol-Myers Squibb has had success with a new immunotherapy, no other biotech company has broken much new ground in the field. Oncothyreon is hoping that by aiming two vaccines against one prominent target, it will get clear answers on what kind of immunity it takes to really rev up the immune system most effectively against cancer. “From a scientific perspective, it’s a fascinating question to ask,” Kirkman says.
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