ChemGenex Pharmaceuticals will gain full commercial control of omacetaxine mepesuccinate (formerly known as Ceflatonin) through an arrangement with its European partner Stragen Pharma to transfer the ownership of Intellectual Property (IP) and commercial rights currently held by Stragen.

Omacetaxine is ChemGenex's lead product in clinical development and is in the final stages of a phase 2/3 clinical trial in chronic myeloid leukaemia (CML) patients with the T315I mutation for whom there are currently no effective drug treatments.

The new agreement will result in the assignment of Stragen's omacetaxine IP suite to ChemGenex, removing the need for an IP royalty on manufacturing and significantly reducing the cost of goods. Similarly, the new agreement removes the need for a European joint venture, allowing ChemGenex to control European development and access all profits from sales of omacetaxine in Europe, including current compassionate use sales of the drug. The new acquisition strengthens ChemGenex's ability to freely pursue multiple commercialization opportunities for omacetaxine.

Reflecting Stragen's manufacturing expertise and understanding of omacetaxine, Stragen will remain ChemGenex's supplier of omacetaxine and will become a significant shareholder.

The new agreement concludes formal manufacturing and commercialization agreements entered into by ChemGenex and Stragen three years ago. Under the prior agreements ChemGenex provided expertise in drug development and clinical trial management while Stragen provided a patented manufacturing process, GMP manufacturing and product distribution expertise. The prior agreements also entailed an IP royalty as a component of the manufacturing cost, and mandated the establishment of a European joint venture to control marketing in Europe. The profit split of sales by the joint venture that had been agreed at ChemGenex 49 per cent, Stragen 51 per cent will no longer be in effect.

"Stragen has been an excellent partner and has worked with us to progress omacetaxine to an advanced state where we have growing confidence in the ability of the drug to be an effective therapy for the subset of CML patients who have developed the T315I mutation and who have failed to respond to imatinib," said Dr Greg Collier, ChemGenex's managing director and chief executive officer.

"This is a logical progression of what has been a very productive alliance to date," added Jean-Luc Tetard, president of Stragen Pharma. "We believe that the consolidation of global IP and commercialization rights for omacetaxine will open a range of new possibilities for ChemGenex to continue to build upon the successes reported over the past year".